Friday 29 Mar 2024
By
main news image

This article first appeared in Digital Edge, The Edge Malaysia Weekly on November 1, 2021 - November 7, 2021

Before the pandemic, the second-hand car industry was at cruising speed. Lim Yon Pin, owner and managing director of RX Motor Trading and Gangsa Motor, says the marketplace became increasingly competitive with new players, but when the pandemic struck, it was difficult for industry players to carry on, as showrooms and offices remained closed.

What the industry needed was a way for the physical aspects of the second-hand car market to be digitised, which is not an easy task. Quickly recognising the industry’s need, myTukar, an online buying and selling platform for used vehicles, digitised about 90% of the car trading process to assist both car dealerships and consumers looking for a second-hand car.

Jeffrey Ong, CEO of myTukar, tells Digital Edge that during the pandemic, the company launched an artificial intelligence (AI) pricing feature that allows customers who want to sell their cars to get an offer on the spot. The system also scours the internet to check prices for similar vehicles before putting in an offer.

Traditionally, a customer who wants to sell his car would need to set an inspection appointment — which requires human interaction. Only after the inspection will the car be listed on the bidding platform for car dealers to bid on. With myTukar, Ong says, the whole process is bypassed. All the customer needs to do is input his vehicle details and upload photos of the vehicle.

“There are two sets of ‘eyes’ involved. First is AI imaging, where the AI will identify cosmetic damages using machine vision technology. Second is the pricing, where the AI’s algorithm has the ability to price the car by scanning through our database,” he explains. “This is how we manage to offer competitive prices in the market.”

After a customer accepts the offer, Ong says, the handover process happens, where myTukar’s inspection team will have a look at the car to check that the customer’s declaration is accurate. If it is inaccurate, the company will take a second look before offering a new price.

“At the end, the process is still subject to the human eye and touch, but based on our experience, the declaration is inaccurate less than 1% of the time. Malaysians seem to be very honest!”

There are two divisions in myTukar. The first is a business-to-consumer (B2C) marketplace, where second-hand cars are sold directly to consumers, and the second is a business-to-business (B2B) bidding marketplace for used car dealers to obtain stock for their dealership. The latter is a wholesale business, Ong explains, where dealers will need to compete to obtain a car for their dealership.

He says they also have an in-house financing arm, Genie Financial Services, which provides stock financing for car dealers under myTukar. This means that dealers can choose whether the cars purchased on the platform receive financing inventory assistance from myTukar. This feature is enabled by Singaporean start-up Carro, which invested US$30 million in myTukar to help digitise the local used car industry.

Car dealers will have a steady supply of cars too and do not need to worry about inventory risk and depreciation, where the car depreciates over time when it is not sold. Ong says this was one of the major pain points that car dealers experienced all year round, pre-pandemic.

RX Motor Trading’s Lim agrees, saying that myTukar serves as a convenient source of inventory. He adds that the dealer bidding platform also has a wide selection of thoroughly appraised vehicles.

“I guess this has to do with the inherent appeal of an open, transparent selling platform available to the masses. Now that more and more people are informed of these benefits, many are turning to such platforms to dispose of their used vehicles,” he says.

myTukar is predominantly web browser-based, which means car dealers will not need to invest heavily to purchase new hardware and software to utilise its offerings. Ong says all they need to do is pay a refundable deposit to start using the bidding platform.

“myTukar charges dealers a processing fee when there is a successful purchase after bidding. This is a revenue source for the company,” he says.

Enhancing tech through innovation

To compete with emerging tech companies in the car dealership space, myTukar has been working hard to come up with new products and features to modernise these dealerships, as well as strengthen their existing technology.

Right now, Ong says, the company is focused on enhancing the current technology employed on the myTukar platform. For example, it is looking at ways to improve the AI pricing algorithm to make it more accurate as well as further automate the vehicle pre-screening process. It is also improving its recommendation algorithms for end-consumers.

The recommendation feature is not available to car dealers yet but Ong says it is something myTukar is looking to launch soon. The recommendations will be based on the dealer’s purchasing habits.

“Within our platform, we have more cars added on a daily basis. It will reach a point where we will have thousands of cars [and] it will be very difficult for dealers to browse for the cars they like. With the recommendation engine, we can suggest the right car for the right dealer. This will also be based on the end-user data,” he says.

Both Ong and Lim anticipate rapid technological growth in the industry over the next few years. Lim says online sales are a critical factor and creative disruption would render the inefficiencies of the old ways a distant memory.

“A robust and transparent inventory sourcing platform complements the work of a used car dealer and those who adapt to the new ways of working will co-exist perfectly well,” says Lim.

“Digital transformation is considered a success only if it benefits the greater population. The existence of bold and disruptive tech-based players across different sectors and industries has the potential to spark a larger-scale digital migration through transactional osmosis, thus bringing the nation closer to its digitalisation goals,” he adds, alluding to the MyDIGITAL Blueprint.

Lim says his business has been using cloud services for storage and transmission of crucial company data for many years. So, MyDIGITAL’s commitment to hosting hyperscale data centres will definitely help the used car landscape thrive.

“It will help companies reduce operating costs and enhance the output by improving efficiency. The net effect would be the democratisation of an increasingly efficient and intelligent dealer inventory management system.”

Ong estimates that only half of used car dealers have digitised the car procurement part of their business. He foresees at least 80% of players digitising their businesses in the next five years or engaging with a platform such as myTukar to solve their inventory issues.

Looking ahead, he says, what is important is to listen and adapt to customer demand for more trust, transparency and clarity about the used cars they are buying. myTukar is positioning itself as the go-to brand for good-quality used cars.

“Malaysia’s used car landscape is at least 20 years behind the developed countries. In my previous job, I studied the used car industry in Europe, which is much more established. In Malaysia, one used car is sold for every two new cars. In Europe, it is the other way around,” he says.

“The reason is pretty simple; people do not feel that trust when they are buying used cars here, whereas it is so transparent in Europe that it [is no different from] buying a new car. Looking at the market movement and demand, used car dealers will need to start adapting to this level of trust and transparency; if they don’t, they will lose out.”

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.

      Print
      Text Size
      Share