The explosive boom that these used car unicorns experienced during COVID has long since gone bust.
For the vast majority of Malaysians today who are in the market to either buy or sell a used car, the first place they will likely consider heading to are certain websites that currently start with the letter ‘C.’
Thanks, after all, to the inherent promise of a hassle-free and (mostly) honest used car transaction experience — not to mention a massive publicity budget that got their names out into the public consciousness — these massive used car retail outlets have since become the least troublesome and most customer-friendly method of buying or selling a used car in Malaysia.
And to be completely transparent from the start, it is worth mentioning that this writer has personally sold a car through one of these larger online platforms. He has also recommended his own friends and family to purchase cars from them, under the reasonable assumption that they would have a more pleasant buying experience with one of these retailers compared to standing under the hot sun and being bamboozled by a typically shifty-eyed used car salesperson.
With all this in mind, let’s ask a very simple question: Can these massive online used car retail unicorns actually continue to survive into the future?
Now, from their ubiquity in the public consciousness and their slick websites, one might reasonably think that the answer to this question would be an easy “yes.” And rather serendipitously, at the time of writing this article, the online platform that uses yellow as its corporate colour has recently announced that it has recorded its first full year of profitability in 2024!
Dig a little deeper though, and beneath the glamorous headlines lies the honest truth: these unicorns’ fortunes are not as bright as their corporate colours might lead one to believe. In fact, it isn’t a stretch to say that these shining examples of Malaysia’s bright automotive and tech future are actually thrashing furiously in a desperate attempt to keep their heads above water.
Both unicorns in Malaysia have been quietly closing down inspection outlets and even workshops, which is certainly not the most convincing sign that business is booming. What’s more, several of their ambitious overseas expansions have already collapsed or faced significant issues. A candid check-in with some of their business partners further reveals that payments for work rendered are starting to slow down from their heyday as well.
Also, just returning to the topic of how a certain online marketplace managed to achieve its first full year of profitability, it is worth highlighting that the company did not disclose exactly how its profit figure came about. Other relevant financial information, such as revenue, was not detailed in their media statement either — which, at the very least, is rather ironic for a used car retailer that prides itself on transparency in its transactions.
To put it rather bluntly here, these unicorns came into being at just the right time to achieve their golden goose status. Both, after all, did spectacularly well riding the high during the pandemic, when the used car retail market in Malaysia was booming as everyone clamoured to get their own set of wheels — either out of necessity or simply as a way to spend their disposable income.
Five long years on from the dark days of 2020 however, and the used car market has softened somewhat. This is not ideal for these venture-backed startups, which rely on sustained explosive growth. Meanwhile, traditional used car dealers have begun to fight back in their own way —pairing lower prices (they don’t have a huge ad spend, after all) with an improved level of customer service to draw prospective buyers back into their forecourts.
Thus, returning to the original question: Can these massive online used car retail unicorns actually continue to survive into the future? Well, honestly, who knows? It all really depends on the whims and fancies of their creditors and investors. Just putting it out there though — FashionValet was recently left to sink…
