CredR to ride deeper into small towns on rising demand for used 2-wheelers

The used two-wheeler firm is in talks for fundraising, plans to double showrooms

CredR, an omnichannel marketplace for pre-owned motorcycles, is in talks with investors to raise another round of funding as the company seeks to make deeper inroads into tier-2  and 3 markets. Sales of used two-wheelers, which are largely unorganised and fragmented, have increased exponentially as preference for personal transportation has gained a lot of traction amid the pandemic. 

Also, a considerable slowdown in the economic activities, layoffs and salary cuts and the uncertainty has sapped purchasing power and buyers are giving preference to used two-wheelers over a new one, says Sasidhar Nandigam, co-founder, CredR. Some 300-400 million used motorcycles are sold in the unorganised market every year in India. For every new bike, 1.2 bikes get sold, he said.    

CredR, which has raised Rs 130 crore in the last six years since it was founded, plans to raise another $30-40 million in the next six to seven months. This will be primarily to go deeper into the hinterlands, said Nandigam. “There is a lot more to India than the top five metros, Bharat is the real demand driver,” he said. Besides being an online marketplace, CredR has close to 25 showrooms in seven cities and plans to double this to over 50 by the end of the year. It envisages increasing the total transactions to over 5000 from the current 2200.  

“Barring the fact that there is a lockdown, the demand for used two-wheelers has been very strong and we have been customers from different regions. We have doubled the volumes of the number of bikes sold in the last three months. Had it not been for lockdown, we would have doubled again this month,” said Nandigam declining to share volume numbers.

Used motorcycles, particularly, in the entry-level segment–100 to 110cc–have been flying off the shelves in 10-15 days now as compared to 15-20 days earlier. Fast selling brands are out of the showroom in less than 10 days, he claimed.  

Unlike pre-owned cars has been getting organised over the past decade due to the entry of various firms including the car manufacturers, used two-wheelers have been selling through all and sundry channels and the market remains highly fragmented.  Besides CredR, some of the other players in the space include olx.in, quickr.com, bikes4sale.in. Most of these are listing platforms, unlike CredR that claims to have a full-stack business model catering to an end-to-end need of buyers.

The sudden and severe onset of the second wave of the pandemic in the country has derailed the recovery momentum of India’s automobile market, Icra said in a note on Thursday.  

Within the different industry segments, the two-wheeler segment is expected to be the most impacted, with the target consumer segment’s affordability and demand sentiment sharply hit. Accordingly, domestic two-wheeler volumes in FY22 are expected to grow by 10-12 per cent now as against 16-18 per cent earlier. 

The growth will come on a low base of last year when sales were majorly hit due to the pandemic-induced lockdown.  To be sure the pandemic is just one among the slew of factors that has kept the two-wheeler sales in a slow lane.  The raft of regulations on safety and insurance, among other things, have jacked up ownership costs and fuelled demand for second-hand two-wheelers, said Nandigam.