BUSINESS STRATEGY TO DEVELOP THE ONLINE AUTO CLASSIFIED PORTALS:

CASE OF OTOMART

By:
Achmad Rifaie de Jong
BLEMBA21
BACKGROUND
INDONESIA HAS HUGE AUTOMOTIVE MARKET

ASEAN Automotive Market in 2015

4,500,000

4,000,000

3,500,000

3,000,000

2,500,000

2,000,000
Used Vehicle
1,500,000
New Vehicle
1,000,000

500,000

-
Brunei
Indonesia Thailand Malaysia Phillpine Vietnam Singapore
Darussalam
Used Vehicle 3,039,873 2,398,896 2,000,022 865,827 627,801 235,827 43,218
New Vehicle 1,013,291 799,632 666,674 288,609 209,267 78,609 -

(Source: GAIKINDO, 2015; Otoasia, 2015)

Indonesia is potential market in automotive, these hefty market trigger the establishment of
auto classified portals to cater car seller and buyer
PEOPLE BEHAVIOUR CHANGE IN CAR BUYING AND SELLING
PROCESS

“As digital technologies started playing important roles in our day to day lives, we expect more
accessible way of information anywhere, at any time and on any device, and this includes researching
and buying cars”

“Consumers spend on average nearly 11 hours choosing the exact vehicle that is right for them”

“Dealers advertise all their stock online – if it is not online, it is effectively not for sale”
CLASSIFIED ADS SHIFTED (Offline to Online)

Newspasper Portals

Typically car seller or dealers utilize classified ads in newspaper before classified portals take
over, meanwhile buyer usually check newspaper or physically visit dealer to buy a car
CLASSIFIED ADS CATEGORY

Horizontal Classified Ads Vertical Classified Ads

Independent

Managed or Affiliated by Finance Company

As of now OLX in total dominations for auto classified ads, the competition in vertical classified is tough.
Other new competitor has been catching up OTOmart fast
ISSUE
RESEARCH QUESTIONS

➢ How OTOmart gain new and sustainable competitive advantage?

➢ What unique value propositions OTOmart can offer?
➢ What strategy to used to improve profit and sales in the future?
Framework

Analysis of Analysis of Strategic

Data Collection Analysis of Business Issue Conclusion
Strategic Plan Survey Result Formulation

PESTEL
Analysis

5 Porter’s
External Analysis ▪ Business Model
Forces
Problem Canvas
Identification ▪ The Strategy Conclusion,
▪ Primary Data
SWOT Analysis Survey Analysis Diamond Implementation &
▪ Secondary Data Competitor
Analysis ▪ Linkages & Recommendation
Innterrelationships
in Value Chain

Value Chain
Internal Analysis
Analysis

Researh methodology is qualitative. Data are coming from survey, interview and, company study.
Analysis approach in external and internal to formulate the business solution and recommendation
SUMMIT AUTO GROUP BUSINESS LINE

OTOmart is managed by Summit Auto Group

No. Company Line of Business

1. OTO Multiartha Car Finance

2. Summit Oto Finance Motorcycle Finance
3. OTO Lease Car Rent & Lease
4. Asuransi Summit Oto Car Insurance
5. Japan Bike Auction Vehicle Auction
1 2 3 4 5 6
6. Premium Garansi Indonesia Car Warranty

SAG business line focus in automotive services, OTOmart is one of the tools to face the challenge in
digital competition
PESTEL

Political & Legal Economy

- Political stable - Digital advetising spending positive trend
- Automotive market conducive - Classified ads market revenue grow steadily
- Commercial license problem - Classified ads still not popular choice

PESTEL

Social Technology
- Car become social status - Internet penetration keep increasing
- Affluent society keep growing - Mobile users penetration increase

External environtment seems conducive and promising, only problem in commercial license
PORTER 5 FORCE’S

Moderate
High capital, high cost brand development

Low High
Large number of suppliers Low switching cost
Moderate

Threat of social media

Low to moderate

Auto classified industry is promising and still in infancy phase especially vertical category
COMPETITOR ANALYSIS

Total Avg. Visit

Website Pages/Visit Bounce rate Founded
Visits/Month Duration
OLX 43.76 M 7:54 12.39 31.06% 2014
mobil123.com 3.80 M 3:39 3.85 57.31% 2012
Carmudi.co.id 2.97 M 2:20 2.71 63.34% 2013
Garasi.id 430K 5:21 7.89 34.45% 2017
Momobil.id 1.36 M 1:06 1.92 73.50% 2016
Seva.id 1.19 M 2:02 2.76 67.23% 2018
OTOmart 641K 3:06 4.49 50.38% 2015

Search
Website Direct Referrals Social Mail Display
Total Organic Paid
OLX 43.76% 1.39% 51.60% 94.78% 5.22% 2.27% 0.83% 0.14%
mobil123.com 27.47% 1.47% 52.12% 79.28% 20.72% 6.52% 0.37% 12.04%
Carmudi.co.id 21.96% 4.95% 67.98% 91.79% 8.21% 2.73% 0.52% 1.87%
Garasi.id 52.61% 1.43% 44.51% 60.35% 39.65% 1.19% 0.26% 0.00%
Momobil.id 6.06% 16.66% 74.54% 47.67% 52.33% 1.18% 0.43% 1.13%
Seva.id 41.37% 27.96% 13.10% 96.56% 3.44% 6.97% 6.79% 3.81%
OTOmart 8.77% 20.60% 70.08% 29.66% 70.34% 0.51% 0.36% 0.03%

Garasi is significant competitor, OTOmart retention rate is very low

SWOT

Strength Weakness
- Have finance company background - Slow on system improvement
- SAG has strong business line - Weak brand
- Offer safe and reliability - Lack of features

SWOT

Opportunity Threat
- Diverse category - Competition growing strong
- Setup physical marketplace - Big Bazaar

OTOmart have to utilize their strong background and keep showing improvement to diminished the weaknesses
Internal Analysis

OTOmart operation in system development is managed by third party and other operations only
managed by 11 internal team
Inbound Logistics Operations Outbound Logistics Marketing and Sales Service
: : : : :
•Platform •System •Apps •Marketing officer •Price comparison
•Web design & development •Web progressive •Paid Search •Search dealer
Primary Activities

concept •Quality control apps •Vertical search function

•Content creation •Customer Relation •Social Media •Financing option
•Navigation •Administration •Promotion goods •Warranty option
structures •Marketing distribution •Concierge services
•Cloud server •Customer services
•Security license •Chatting

Margin

Firm Infrastructure : Business development, finance & accounting, legal

Human Resources : Personnel, training, people development, knowledge transfer

Technology Development : A/B test, R&D, database usage

Procurement : Sourcing, specification

Support Activities

OTOmart major weaknesses is in system development & human resources

 SURVEY & INTERVIEW INSIGHT

1. OTOmart brand awareness is still weak among dealers

2. There are still many dealers utilize broker as way of selling cars
3. Dealers is yet feeling the benefit of using premium services from auto classified portal
4. OTOmart majority visitors are millenial
SOLUTION
OTOMART MUST FOCUS IN LINKAGES OPTIMIZATION TO GAIN
COMPETITIVE ADVANTAGE

Activities Expected Result

Having internal web developer will optimize most other value activites creation
In house web developer
as it will bring more ease in operations

Increase ads supply More ads will atract more visitors. Having fresh and a lot of ads is strong point

Add digital marketing team, social media, public relation and moderator team
Scale up the organization
to provide more excellence services

More promotion will acquire more visitors. The more visitors OTOmart have
Promotion diversification
will attract more dealer to join
OTOMART MUST UTILIZES INTERRELATIONSHIP WITH SAG OTHER
BUSINESS LINES

Car Financing

Car Insurance

New Value
Chain

Car Warranty

Vehicle Auction

The collaboration with other business line will create new value chain and gain competitive advantage
 FOCUS ON DEALER DEVELOPMENT

1. Focus on B2C
2. Provide excellent features (such as Content Relation Management and Price Comparison)
3. Offers subscription base program with dynamic pricing
4. Pilot project in big area
 FOCUS ON CUSTOMER SERVICES

1. Start build own apps

2. Focus on customer relation and services
3. Provide excellent car buying assistance
4. Provide excellent customer services
 REVENUE STREAM

1. Dealers
2. Lead generation
CONCLUSION
CONCLUSIONS

Competitive Advantage Value Propositions Monetization

- Linkages optimization - B2C - Subsciption base program
- Interrelationship collaboration - CRM - Dynamic pricing
- Complete car buying package - Lead generation
THANK YOU!!!