- BRW Lists
Published 02 October 2013 11:50, Updated 03 October 2013 07:38
iCar Asia is trying to tread the same path Carsales has followed in Australia. Photo: Bloomberg
Since iCar Asia, the company backed by BRW Young Rich lister Patrick Grove , secured a $13.4 million investment from Australia’s largest car sale website, Carsales.com, its share price has soared.
Based in Kuala Lumpur, Malaysia, iCar Asia is the largest network of online automotive sites in ASEAN, reaching 2.5 million people every month across Malaysia, Thailand and Indonesia.
The company listed on the Australian stock exchange in September 2012 at 20¢ a share. In March, Carsales took a 19.9 per cent stake in iCar Asia, and now its share price is moving close to the 80¢ mark (its price this morning was jumping between a high of 0.795 and low of 0.770).
iCar Asia has a long way to go to become profitable and thus far the company has been suffering losses as it rapidly expands across Asia. For the year ending June 30, the company incurred a loss of $2.78 million, with expenses far exceeding its revenue of $551,000.
Chief executive Damon Rielly, who moved to Malaysia with his family in 2011 to head up Catcha Digital before jumping across to iCar Asia last year, says they are not currently charging dealers to list on the site.
“At this stage, it’s purely about increasing market share,” he told BRW during a visit to Australia last week. “It’s like a land grab in online classifieds. It’s all about making sure we are No.1. You need to first get all the car buyers you can going to the site, and then you can become a lead for the car sellers.”
iCar Asia’s brands include Carlist.my, LiveLifeDrive.com and EVO magazine in Malaysia, Thaicar.com and Autospinn.com in Thailand, and Mobil123.com in Indonesia.
The website has 350,000 cars for sale, and “more than 2.5 million buyers coming to our site each month”.iCar Asia is yet to reach the heights of carsales. The company has a market cap of about $156 million, while carsales.com has a market cap of around $2.1 billion.
The race for No.1 in Asia’s car classifieds
In June, Thaicar.com announced it had more cars listed for sale than any other website in Thailand. Thaicar.com grow the number of cars for sale on the site to 45,850.
In May, Carlist.my took the No.1 spot as Malaysia’s most visited automotive site, with 7.25 million unique browsers, and a 28 per cent increase in visits to its site.
Part of the iCar Asia’s strategy of going to number one is to model itself on Carsales. “We are initially looking at a subscription model, similar to the one that Carsales used to use,” Rielly says. “You pay your annual or half-yearly fee to list on the site.”
Although 90 per cent of all listings on iCar Asia come from car dealers (the other 10 per cent is private listings), for the time being dealers are not being charged to list.
“If we get to No.1, the opportunities are massive,” Rielly says. “We are starting to build on our private listings. But for now, the aim is to get as many listings on the site as we can, grow the audience and then use that to attract paying sellers.”
Rielly says a big part of this is about “having the right technology to prove that you’re capturing leads in order to attract sellers”.
“That’s what we are working on now,” he says. “We are making a reasonable investment in our technology platform to be able to capture and deliver leads to car sellers. The relationship with Carsales is important because it brings a history of cars sold in Australia through Redbook.com.au. We get exclusive use of Redbook and all its data as part of our relationship with Carsales.”
iCar Asia’s mobile strategyRielly says iCar Asia’s mobile strategy is crucial to becoming number one in Asia.
He says Carlist.my and Mobil123.com, both mobile-optimised sites, have registered a massive 186.6 per cent and 415 per cent increase in mobile page view growth between January and July this year respectively.
Thaicar.com will launch its mobile optimised site this month.
Like Catcha Group founder Patrick Grove, Rielly is optimistic about growth in Asian online businesses. In June Grove told BRW that he thinks his online companies in Asia all have strong growth potential because the ASEAN region’s population is set to grow to 660 million by 2020, and Asia has one of the highest levels of broadband and smartphone penetration.
Rielly says they are doing business in the region's three largest regions – Indonesia, Malaysia and Thailand – and that nearly 95 million people connect to the Internet across those three countries.
“Malaysia is leading the world with 80 per cent smartphone penetration, compared to Australia’s 75 per cent,” he says. We estimate that this year 3.2 million new cars will be sold across the three countries, compared to 1 million in Australia.”
Rielly says online advertising rates are also growing faster in Asia than Australia. “Last year $16.5 billion was spent on advertising (online and traditional) across the three countries, compared to about $13 billion in Australia,” he says.
According to Mobile Monday’s Mobile Southeast Asia Report 2012, the ASEAN’s surge in smartphone ownership will also see many first-time Internet users come online via smartphone rather than desktop computer,
Mobile capital expenditure in the Asia-Pacific region is estimated at about $US53.3 billion. The report says nearly 7.7 million mobile phone units were purchased in the first quarter of 2012. Indonesia brought in sales of more than $US1.4 billion in smartphones in 2011, and markets like Singapore and Malaysia have a smartphone penetration rate of 88 per cent.
The share of smartphones has been rising and contributes more than 66 per cent to the region’s overall mobile phone pie, up from a 2011 figure of 50 per cent.