Having raised angel funding this week, Caramo hopes to put the brakes on the stigma associated with buying used cars in Vietnam.
The process is similar to other countries: sellers have to go through brokers or dealers who take hefty commissions, and buyers often get shortchanged or end up being stuck with a lemon.
Caramo seeks to solve those problems by connecting used car buyers and sellers directly with each other, cutting out the middlemen.
It also uses a “magical” algorithm that determines fair prices for sellers.
An end-to-end marketplace, it helps in all stages of the transaction – from listing to after-sales services, where it connects buyers with qualified car maintenance and repair providers.
“Caramo will coordinate the paperwork and payment process, ‘till the time the buyer receives the car, and the seller gets the money,” says CEO Cong Tran.
Making guarantees the norm
The startup developed a 240-point inspection system that assures buyers that cars sold on the site are in good shape.
It also put in place a 10-day return policy in case a buyer discovers that a used car doesn’t look or work as advertised.
In the future, it’s considering offering a guarantee for sellers – where it promises to buy a car listed on the site if there are no takers after a month. “We’ll do that when our volume is big enough,” says Cong.
It’s too early to talk about the company’s traction as it’s still in its pilot phase. So far, Cong says they’ve received 65 requests for buying and selling, signed nine contracts, and completed two transactions. Caramo earns through a 6 percent transaction fee it charges sellers.
Players that have set up the same business in other markets include Carro and recent Carousell acquisition Caarly in Singapore, as well as Carsome in Malaysia. Cong claims Caramo is the first of its kind in Vietnam.
Citing 2016 data from analysts, Caramo says Vietnam’s second-hand car market amounts to US$3 billion a year.
While it’s a big industry, cars are known to be less popular than motorbikes in Vietnam. Asked whether they’re looking at motorbikes as well, Cong says, “we’re focusing on used cars first before expanding to other categories or related products.”
Caramo has raised an undisclosed amount of funding from angel investor Jonah Levey, whose company VietnamWorks was acquired by En-Japan for a rumored US$22 million in 2013.
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