Carousell’s next golden egg: used cars?

Welcome to The Checkout! Delivered every Thursday, this free newsletter breaks down the biggest stories and trends in ecommerce. [Read from your browser]( The Checkout 🛒 Welcome to The Checkout! Delivered every Thursday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in ecommerce. If you’re not a subscriber, get access by [registering here](. Written by Jofie Yordan Journalist Hello {NAME} It's been raining almost every day lately in Jakarta, which is making it hard to leave the house without using a car. As a result, I've been checking out some models, but looking at their prices, it seems I'll have to rethink buying a new one. Maybe a used car could be the best choice. In Southeast Asia, the digital revolution has come to the used-car space, with platforms like Carro and Carsome letting users purchase a car directly with their electronic devices. In this week’s Big Story, my colleague Nikita explores a rising player in the space: Carousell Auto, which has become a big bet for the Singapore-based secondhand marketplace. Launched after Carousell saw large demand for used cars among its customers, Carousell Auto has since accounted for a third of the company’s revenue as of April 2021. Will this be a game-changer for the Singapore-based firm as it eyes an IPO this year? Or will it face stiff competition from existing players? In addition, I look at the slowdown in China’s community group-buying space. Will this have an impact on similar players in Indonesia, who are still in their early stages? More on this in today's Hot Take. -- Jofie THE BIG STORY [Behind Carousell’s bid for the $61b used car space in SEA](  Image credit: Timmy Loen Carousell’s autos vertical accounted for a third of the Group’s revenue last year. Can it continue to be a bet-worthy horse? THE HOT TAKE China's group-buying space is in trouble. Should Indonesian players worry? Image credit: Timmy Loen Here’s what happened: - In China, the total value of goods sold via community group-buying saw a quarterly growth of 65% in the second quarter of 2021 to reach US$8.6 billion, but it fell to US$7.5 billion in Q3. - A number of Chinese startups in the space have either filed for bankruptcy or reduced operations amid the “subsidy wars” in the market. - Meanwhile, in Indonesia, startups in the space are still heating up with new funding and growth. Here’s our take: After gaining popularity in 2020, the community group-buying market in China is slowing down after a [price war]( sparked an [anti-competitive crackdown](. Players are feeling the pinch. Last month, Alibaba-backed community grocery platform Nice Tuan shut down its operations after months of struggles. Its rival Tongcheng Life was declared bankrupt in July 2021. Meanwhile, JD.com shifted its resources from community group buying to its rapid grocery delivery business, which focuses on high-end consumers in big cities. Will these setbacks give off warning signs for Indonesian companies operating with the group-buying model? That doesn’t seem to be the case, at least for now. Super, Kitabeli, and Evermos all raised funding rounds throughout 2021, and RateS secured US$6 million in January. Many of these players also experienced good growth last year. Evermos, a social commerce startup focusing on halal products that also uses the group-buying model, said its total transaction value [increased by more than 60x]( since 2019. Meanwhile, social commerce firm Woobiz said that it had [achieved an 18x growth]( in total processing value in 2021 compared to the previous year. But perhaps the biggest difference between Indonesia’s group-buying space and China’s is the lack of big players in the former. Indonesian heavyweights like Tokopedia and Bukalapak mostly [avoid the group-buying model]( in favor of the more general online-to-offline Mitra models. Plus, these unicorns’ IPOs may push them to prioritize profitability. It’s likely that GoTo is not entering a new segment like group buying, at least for now. This lets the existing group-buying players - which are still in the relatively early stages - compete without the possibility of a price war against rivals with superior war chests. But the market can change in an instant - the Indonesian players may meet the same fate as their Chinese counterparts, or they may become the dominant names in the country’s ecommerce scene. -- Jofie  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ Shein, the Chinese ultra-fast fashion giant, is [looking to raise roughly US$1 billion]( at a valuation of around US$100 billion. 2️⃣ Armada Brands, an ecommerce aggregator based in the Philippines, has [raised US$1.3 million]( in a pre-seed round led by M Venture Partners and Foxmont Capital Partners, with Antler and Sketchnote participating. 3️⃣ Cainiao Network, the logistics arm of Alibaba Group, has [rolled out a digital end-to-end ecommerce logistics service]( for SMEs. 4️⃣ Meesho, an India-based social commerce firm, is [rebranding Farmiso]( its grocery business, to Meesho Superstore. It will also integrate the grocery business into its core app, which is expected to be completed by the first week of May. FYI [Lazada CEO warns against ‘walled garden super app’ in tech]( Lazada Group CEO Chun Li Chun Li, CEO of Lazada, said digital companies in Southeast Asia should steer away from creating walled-garden super apps in favor of more collaboration and differentiation. That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you next week! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. 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