Erwin Sikma, whose success mantra is to 'Get things done!' is Co-Founder and Managing Director of Carmudi.com. While at Rocket Internet, Carmudi's incubator, he founded 12 classifieds ventures in Asia. Known for his passion for cars and entrepreneurship, Erwin Sikma has scaled up Carmudi's operations into 18 countries within a short span of 6 months.
Before making the decision to become an entrepreneur at Rocket Internet, Erwin was a strategic adviser with McKinsey and Company serving large corporations and institutions across the US, Russia, China, Middle East and Europe. Previously, he had been responsible for Sales and Marketing for Heineken in Sierra Leone and supported Kempen Capital Management on topics such as currency hedging.
Erwin was born and raised in the Netherlands. He holds a Master's degree with distinction in Financial Engineering. He is passionate about bringing top notch online services to emerging markets and providing the transparency and security that people deserve.
Below are the edited transcripts of a recent sit down with him during his recent visit to Pakistan:
BR Research: What has been your experience with Rocket Internet?
Erwin Sikma: I set up four companies in Myanmar. While at Rocket internet, I was responsible for rolling out Carmudi--the online marketplace for buying and selling cars-and Lamudi--the online real estate platform-in seven to eight countries in Asia. I was transferred to Carmudi since it was growing very fast, though I am still involved in other ventures of Rocket Internet like Lamudi, Daraz, and Kaymu.
BRR: Tell us what exactly is Carmudi.com?
ES: Carmudi is an online portal for cars and vehicles where people can go to either buy or sell their vehicles. It is an online marketplace that brings together people who want to buy with individual vehicle owners or vehicle dealers that want to sell. It aggregates new, second-hand and refurbished vehicles from dealers and private sellers; and also provides additional services like vehicle reviews, organised information and shopping advises to the buyers.
We are now in 20 countries with presence in Latin Americas, Africa and Asia at this moment in time, and we are launching in some more countries in the next couple of weeks. In Asia, we have entered seven countries including Pakistan, Vietnam, Bangladesh, Philippines, Indonesia, Sri Lanka and Myanmar.
In Pakistan, Carmudi holds a large selection of car models, from famous brands to local cars, which allows you to buy anything from cars to bikes to any other form of commercial transport. The website is user friendly and highly accessible; and we have also launched our mobile app for various countries including Pakistan.
At present, our contracts in Pakistan include dealers like Al-Wahab Motors, Sawera Motors, HN Motors, Vintage Cars and Martial Cars among others.
BRR: Coming in from the Europe's Silicon Valley, Berlin, what opportunities do you see in Pakistan?
ES: There are a couple of general factors. Our expansion into Pakistan is a very logical step given its population size and the lack of such services in the country.
We see Pakistan as a very high potential market because it's a big country with around 180 million in population. Internet penetration is at sufficient levels and access to phone internet is growing rapidly. Besides these, the quality of manpower is improving not only in terms of how well-educated people are in adopting our services but also we can recruit people to build our business here. We hire local recruits from all the top universities to run the business process, while we only provide them with technical platform, company norms and funding. All operations in Pakistan are run by these employees and teams of young, talented individuals.
BRR: How well is Carmudi performing in Pakistan?
ES: Carmudi was launched in January 2014, and in the eight to nine months of its existence in Pakistan we have aggregated 35,000 vehicles from around 800 dealers across the country. We expect faster growth in the next couple of months as we are now also focusing on individual sellers who can use to platform to sell their vehicles.
BRR: Why so many companies under Rocket Internet umbrella? Why not a single internet platform where all kinds of buyers and sellers meet? There also exists some tough competition for Carmudi in Pakistan, how do you differentiate your platform?
ES: Cars and vehicles are huge investments and so is real estate. On the other hand, mobile phones, clothes and other stuff are short-term purchases. We believe bringing everything under one roof like many other online selling platforms will compromise the quality of service. We want our customers to make the right decision by making sure they see all the options and trust the dealers. We are much more involved as we screen the dealers, information and listings on our website and since there is solely either car or real estate platforms, we are able to offer much more guarantees and additional services. In a nutshell, if we talk just about Carmudi, we are trying to revolutionise the online car market.
One feature that differentiates us from other online websites is that from classifieds to related information, we only deal in cars. As I mentioned, we want to give undivided attention to our services whether it Carmudi, Lamudi or any other.
As far as competition in online car market is concerned, we are doing pretty well. In just nine months' time, we are pretty well-known already. Our marketing strategy is much targeted, and you won't see any billboards around promoting Carmudi.com
BRR: Can you tell us about your revenue model?
ES: As opposed to online classifieds, we are using a subscription based model where the car dealers sign up for certain duration and for a certain quantity of cars they want to showcase online. This way, the revenue stream is more steady and better. On the flip side, we are opening up the portal to individual sellers where we want them to come and list with us for free and charge them for any premium services they require.
These models work best when you make viewing free and not restricted to a certain number of searches and products.
BRR: what kind of synergies do you have across the companies under Rocket Internet? Can there be a case of cannibalisation?
ES: We have a lot of synergies across our major brands like cross marketing, talent acquisition, technology. But the most important of them all is the knowledge that we share. And this is also the reason why there can be no cannibalisation as even though there is some overlapping and some changes in business models, knowledge is shared across to harmonise the entire e-commerce platform while business models are fine-tuned.
BRR: What are the main issues you face in Pakistan? With 3G/4G coming in, how do you think that will affect the ecommerce market?
ES: Every country is unique and has its own issues when it comes to e-commerce. So we tweak our way to localise and adapt these issues. At the same time some common issues especially in the emerging markets include trust issues related to privacy, fraud, bogus listings, etc.
In Pakistan, internet penetration is very low. But at the same time, we are also seeing a huge spurr of growth in cellphone. And with 3G/4G coming in, we already have a mobile app for Carmudi. Right now this application is just a buyer's app, but soon we will be launching our fully integrated application within the next couple of months where you can buy and sell vehicles at your ease.
BRR: With only 10 percent of the population banked, what kind of payment solutions can you offer?
ES: We are evaluating different options for offering payment solutions like telcos and other channels for our private sellers. So far we have had no problem with payment mechanism as our dealer-model has been subscription based, which is probably why we delayed launching various payment solutions.