In an interview to e27, iCar Asia CEO Hamish Stone claimed that in Malaysia, it has 10x more listings than its nearest vertical competitor and 1.7 times it nearest horizontal competitor

Australia Securities Exchange-listed iCar Asia is a leading automotive portals network in Southeast Asia. The group owns and operates over half-a-dozen portals, including Carlist.my and LiveLifeDrive.com in Malaysia, Mobil123.com and Otospirit.com in Indonesia, and One2Car.com, Autospinn.com and Thaicar.com in Thailand.

Headquartered in Kuala Lumpur, the network has a combined reach of over 11 million across the region, and had a 41 per cent year-over-year revenue growth for the financial year 2017-18.

Riding on  this strong growth, the group is now looking to consolidate its position in the region by branching into more verticals and adding new revenue streams.

In an email interview to e27, iCar Asia’s CEO Hamish Stone shares the company’s performance, the online automobile market, competition and goals.

Edited excerpts:

iCar Asia has been in the market for quite a few years and has consolidated its position in Southeast Asia. What is the next big move for the company, given the advent of cutting-edge technologies like AI, Machine Learning, IoT etc.?

Since the introduction of internet, it has undeniably changed the way consumers solve their everyday problems and needs, and how businesses operate across different industries to leverage technology to solve these problems.

This digital revolution has disrupted the business world through the convenience that it provides for consumers. It is imperative that companies embrace the evolution of internet, as it has opened the door to great innovations that are disrupting the way we do everyday things.

As such, at iCar Asia, we have always looked for innovative ways that we can solve consumers automotive needs, leveraging technology and digital platforms. This will continue to remain a core focus.

iCar has released its new car product in Malaysia (soon to follow in Thailand and Indonesia) – an Artificial Intelligence AI-powered way to select and buy a new car. The chatbot has many abilities, but its main focus is around being able to segment and tailor information to a user, analyse behaviour and suggest alternative makes and models during a conversation, respond to consumer questions around car specifications, and stock availability based on the information provided by the car dealer. The chatbot is truly a learning organism that becomes more sophisticated every day.

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In addition, we are branching into finance, insurance and warranty sales which has enormous potential. We partner with leading financial, insurance and warranty providers to provide a one-stop shop for the full ownership experience. It is part of our strategic vision to offer value to consumers in their buying, owning and selling experiences, throughout their entire ownership of the car. These additional partner products that we offer ensure that iCar Asia is adding value along that journey.

This year, our focus will be on:

• Audience and leads dominance with improved conversion, app and messaging adoption
• Used car dealer engagement through digital training, app usage and product adoption
• Uptake of the new car transaction model
• Expanding online advertising solutions into physical events
• Expanding into car services including finance, insurance and warranty.

Despite the emergence of cutting-edge technologies, there have hardly been any notable innovations in the listing space, other than chatbots. Is there a room for more innovations? What features are you currently working on?

When we launched our ‘new car’ section last year, one of the core features of that highly-innovative platform was our AI-enabled chabot. This is to aid consumers in their journey of buying their next new car.

The all new iCar Asia chatbot is set to improve the quality of engagement between buyers and sellers. It has many abilities, but its main focus is around being able to segment and tailor information to a user, analyse behaviour and suggest alternative makes and models during a conversation, respond to consumer questions around car specifications, and stock availability based on the information provided by the car dealer.

With the iCar Asia chatbot, we have totally revolutionised how consumers and sellers interact with each other with its ability to learn behaviour and provide relevant answers and information.

Another key feature we are looking at exploring is around videos to showcase our listings. Countless studies have shown that videos attract more eyes to a listing, increases time spent viewing the listing, and generates better-quality leads for our customers. They are increasingly becoming more popular on the internet. While it is often said that pictures paint a thousand words, just imagine what videos can do.

Videos provide more engagement and also build an emotional connection with the brand. By having video listings, you are able to see every aspect of the car that you are intending to purchase.

Can you shed lights into the performance of your various units?

We are the largest and most-trusted online automotive portal in all of our markets, with more listings, audience and leads than any other vertical marketplace for the automotive sector.

The year 2017 has been exceptional for iCar Asia, as we made the right choices in product investment, technology, marketing optimisation and the reshaping of the sales process. These choices have delivered growth in all of all our key operating metrics and a return to strong revenue growth across all markets while tightly controlling costs. This demonstrates that iCar Asia can deliver sustainable growth as it heads towards profitability.

Our 2017 full-year financial report saw revenue growth of 41 per cent y-o-y (FOREX-neutral) to A$9.1 million (US$7.09 million). We delivered this growth with an increase in costs of only 2 per cent. Of the A$2.4 million (US41.87 million) of additional revenue added in 2017, A$2 million or US$1.56 million (81 per cent) flowed through to EBITDA with losses decreasing by 14 per cent y-o-y to A$11.8 million (US$9.19 million).

As at 31 December, we had A$21.5 million (US$16.75 million) in cash and cash equivalents. Following the recent capital raising initiatives, the company has access to up to an additional A$15.9 million (US$12.39 million) in funding net of all fees, for a total of up to A$37.4 million (US$29.14 million) in conditionally available funds.

These financial result were achieved in conjunction with delivering growth in all of the company’s key operating metrics in all countries.

Highlights for the month of December 2017 include:

•  48 per cent y-o-y growth in total audience numbers across the Company to 11.2 million unique visitors
• 42 per cent y-o-y growth in total leads across the company to over one million leads
• 23 per cent y-o-y growth in total paid accounts across the Company to over 5,900 accounts
•  52 per cent y-o-y uplift in the total number of bumps across the company (note: a ‘bump’ is a paid product which promotes a listing to the top of a relevant search result) to 247,000 bumps
• Total listings growth of 12 per cent y-o-y to 479,000 live listings

In terms of revenue, we saw a 29 per cent year-on-year revenue growth and 39 per cent improvement in EBITDA loss in Malaysia. In Thailand, we saw a 39 per cent y-o-y revenue growth and 32 per cent improvement in EBITDA loss. In Indonesia, we had a 85 per cent year on year revenue growth with a 21 per cent improved EBITDA in the second half of 2017.

In 2018, we expect to continue to grow our core business of used cars and advertising solutions, and leverage our market leadership positions to further establish our new car, events and car services operations.

How has been your used-car unit performing? Do you plan to expand this business further?

As of 31 December 2017, across the group, we had more than 470,000 car listings live on our portals, and attracted over 11 million unique visitors to our portals, making us the largest car marketplace in Southeast Asia. With this business continuing to grow each year, we expect further expansion in 2018.

The purchasing power of the population in our markets continues to grow and with it the ability to purchase a car. We are seeing measures like GDP per capita get to levels which will start to drive up car ownership in our markets.

Your presence is largely confined to Southeast Asia. Have you ever looked at markets outside of this geography, such as India or China?

Our core focused is still in Southeast Asia at the moment, focussing primarily on the markets that we are in — Malaysia, Indonesia and Thailand.

Are you working on any other new revenue streams?

We have continued investments in key areas of the business to increase monetisation and drive expansion into new areas as well.

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This includes new areas of revenue where we see our new car transactional business being a key new revenue stream. This will allow us to partner with new car dealers, help them sell more cars, and then take a sales commission on that car.

We have also expanded into other new services, driving revenue growth from

• Inspections services
• Origination fees from finance and insurance
• Selling Warranty products to new and used car buyers
• Brokerage fees for the sale of private individuals used cars to other consumers or our network of car dealers.

Since your inception, you have acquired several companies, including LiveLifeDrive.com in Malaysia and One2Car in Thailand. Any more new deals in pipeline?

We are always on the look-out for new possibilities, but because we are a publicly-listed company, we are not a liberty to share any further information on this.

One of the greatest challenges for consumer internet companies in Asia (particularly India) is the huge cash burn. How does iCar Asia address this challenge?

To avoid a huge cash burn, it is important to have a strong cost management in place. This includes identifying your expenses and being able to identify areas that you can reduce cost is crucial.

Our cash burn dropped last year from A$1.3 million (US41 million) per month to A$1.1 (0.86 million) per month.

There are quite a few companies in the car listing space in the region. How tough is the competition?

We are number one in Southeast Asia and our recent y-o-y results in 2017 have revealed that. In Malaysia, we have 10 times more listings than our nearest vertical competitor and 1.7 times our nearest horizontal competitor.

In Indonesia we have 4.3 times more listings than our nearest vertical competitor and 1.1 times our nearest horizontal competitor.

In Thailand, we have 2.1 times more listings than our nearest vertical competitor.

World over, governments are batting for green/eco-friendly vehicles. Do you have plans to tap into this opportunity?

A recent study, commissioned by Nissan, by Frost & Sullivan entitled “Future of Electric Vehicles in Southeast Asia”, have revealed that 37 per cent of prospective buyers from Singapore, Indonesia, Thailand, Malaysia, Vietnam and the Philippines are open to considering an electric vehicle as their next car.

We are most definitely interested in this trend, and through our platform will continue to provide great content and functionality to help car buyers decide on which car is the best for them as they are ultimately the people that will drive and purchase the car.

Of course, with the right incentives the region, we can accelerate the adoption of electric and electrified vehicles.

Blockchain and cryptocurrency are now the new buzz words. Do you see any potential for these technologies with respect to iCar Asia’s digital properties?

We are interested to see how these types of technology innovations (cryptocurrency and blockchain) can be applied to car ownership transfer. It is also something we are discussing internally and looking into how we can take some first steps in these areas.

In November last year, you raised US$19.3 million. Is this funding exhausted? When are you raising the next round of funding? Will you look to raise from the same set of investors?

The US$19.3 million that we raised last December was made up of a share rights issue with an attached option to existing shareholders and a loan facility.

The investment was channelled towards accelerating growth, increasing product development and operations, optimising new car and used car platforms, and improving mobile app functionality to drive user engagement. It was also channelled towards investing in sales and operations to support the rollout of the transactional new car business.

Why do you raise private investment in spite of being a public-listed company? What are the advantages and disadvantages of both forms of fund-raising?

iCar Asia was listed on the Australian Securities Exchange in 2012 and since then, we have used the issuance of shares in our business through this exchange to raise capital. As such, there is no longer any private investment in the business. We have found this to be an effective method to raise capital in order to grow our business for example, capital was raised using this method in order to acquire businesses in Thailand.

Private and public funding methods both have their pros and cons. For iCar Asia, the public funding route has been a very effective way to raise capital in order for the business to continue to invest and expand into new markets. With it comes reporting and communication obligations. Whilst these are arduous for a company of our size, it does give a lot of clarity and assurances to our shareholders on the progress of the business.

The post iCar Asia is working on video-based listings; to roll out chatbots in Thailand, Indonesia appeared first on e27.