Abstract

The case study ‘CarTrade: An Online Automobile Marketplace in India Turns Profitable’ describes how CarTrade Tech Limited (CarTrade), an Indian multi-channel automobile platform, became the first profitable digital automobile platform in India. The case touches upon the company’s rapid growth through a series of acquisitions from 2015 to 2020. This is followed by a description of several value enhancement strategies that CarTrade adopted, including diversification across vehicle types, provision of online and offline touchpoints to customers, application of scalable and agile digital technologies, extensive use of data science, and low-cost marketing techniques to consistently lower operational costs, increase revenue, and turn profitable. The case study then touches upon the financial performance of CarTrade from FY2019 to the nine-month period ended December 31, 2020. Next, the case study describes in detail the business model of CarTrade. The company operated on an asset-light model and offered a number of solutions and services through its seven platforms (mostly acquisitions) namely – CarTrade, CarWale, BikeWale, ShriramAutomall, CarTrade Exchange, AutoBiz, and Adroit Auto. The company invested heavily in digital technologies to create a seamless connect between automobile customers, OEMs, automobile dealers, insurance companies, banks, and other associated businesses. It also offered automobile research and discovery tools, pricing tools, and personalized automobile finance and insurance plans to customers. CarTrade also offered digital automobile inspection tools, Enterprise Resource Planning (ERP) software, and Customer Relationship Management (CRM) tools to other businesses associated with the automobile industry such as insurance companies and banks. This helped it generate additional income apart from the income from its core business of automobile purchase and sales. It also helped the company achieve operational efficiency and sustain profitability. The case then describes the digital marketing strategies of CarTrade and how the company lowered its marketing costs by implementing the Search Engine Optimization (SEO) technique. The case finally touches upon CarTrade’s future plans of developing and offering new services and investing more resources in technology to provide real-time and relevant information to target consumers and acquire high-value businesses that would add to its profitability.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Examine how digital technologies can help companies turn profitable
• Gain awareness of the network effect phenomenon and examine its benefits
• Learn about the asset-light business model and its advantages
• Learn how digital marketing technologies reduce marketing and advertising costs and lead to efficient customer acquisition
• Understand the criteria that investors look for when a company goes in for an IPO.

Keywords

Network Effect; Platform Model; Acquisitions; Services Marketing; Service Delivery; Digital Technologies; CRM Tools; ERP Systems; Inorganic Growth Strategy; Scalable Business; Business Ecosystem