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Bad experience translates to BIG business idea

Cred R - the Indian marketplace for used bikes

In a nutshell

Cred R is a name that is adapted from the Latin word credere - which stands for trust, credibility. It's what Sumit Chhazed and his friends did not get when as college students, they bought a second hand bike. It broke down frequently soon after they bought it, and then the engine just packed up. They felt jipped. But that bad experience was the starting point of a BIG business idea that they hit upon - to create a credible marketplace where people could trade used bikes at fair prices in a transparent manner. Cred R was born in 2014, and within just 2 years, it has already served over 25,000 satisfied customers and is now eyeing a large slice of a huge market that these youngsters stumbled upon - a market that sees over 15 million used bikes changing hands each year, across the country.

Cred R's credo - of offering trust, convenience and transparency backed by technology - is exactly what many of the new age online financial distributors have embraced in our business. Learning from the Cred R experience can be an invaluable guide for those who wish to revolutionize financial products distribution through tech enabled initiatives.

A credible marketplace for used bikes

Cred R is an online platform for buying and selling used bikes. It's promoters are 3 young IIT graduates: Sumit Chhazed, Nikhil Jain and Nittin Mittal.


CredR aims to redefine the used vehicles market utilizing web based technologies. According to Chhazed, "CredR's aim is to revolutionize the pre-owned automobile sector in India by adding trust, convenience and transparency backed by technology."

"Our first focus at CredR is to change the age old perception about pre-owned vehicles. We want to make the transactional process as smooth and hassle-free as making a firsthand purchase at a showroom. The vision is to make the platform so technologically robust that it becomes a de-facto standard for buying/selling pre-owned automobiles and for assessing fair value of a pre-owned vehicle." says Nikhil Jain, Co-Founder, CredR.

The company aims to deliver enhanced customer experience for pre-owned vehicles, on par with that of new vehicles. The service is reliable, rapid and convenient. Care is taken to ensure that the transactions are transparent and between genuine buyers and sellers.

The three lacked both capital and more importantly experience in starting up a business. To fill this crucial need, they turned to experienced hands. CredR was midwifed by GrowthStory, a Bangalore based venture capital firm, which specializes in helping entrepreneurs start up from scratch. "The level of convenience, transparency, security and price guarantees that CredR offers is unheard of in the pre-owned vehicles market in India. CredR's full stack service leveraging mobile, internet and technology will organize what is a hugely unorganized category; it is the next big frontier in business models focused on vertical market places," says K Ganesh, Partner, GrowthStory.

Value for money

The objective of the company is to give customers a smooth, reliable and transparent deal, while buying pre-owned vehicles. The bikes are tested by experts on eighty plus parameters, before being certified as fit for sale. A free test ride is given to potential buyers, while the bikes come with six months warranty and free roadside assistance for one year.

"Present market does not have any standardised system to rate second hand bikes, rendering inefficient pricing of automobiles. With CredR, we have developed an advanced algorithm to determine fair pricing system for every listed vehicle based on the 80+ parameters of the bike," says Sumit Chhazed, Co-founder of CredR. He also adds, "As opposed to the general listing model, we are focused on end to end customer satisfaction, by becoming the one stop solution to every customer problem entailing from verification to post sale customer support."

The company aims to ease the pain points for customers in buying second hand bikes. Chhazed said, "Even today, selling or buying second hand goods involve lots of hassle and lack of trust. No one stands to add to the credibility of second hand goods or offers after sales services for bikes and cars."

The process for buying is quite simple. The specialty of the company is that it offers free inspection of bikes put up for sale. The site gives what it considers as the fair price for each bike. The customer makes a choice and buys a bike on CredR. Then, within seven days of the purchase, the customer can identify a similar bike. The bike should be of the same model, name, year of manufacture, as the one already bought and it should not have been listed on the CredR site. The proposed bike would be inspected by CredR technical team and evaluated on set, standard parameters. Then the two bikes would be compared. If the proposed bike is cheaper, or equal to or better in quality, then the customer would be refunded the difference amount between his CredR purchase price and the other bike. The other bike can also be listed on CredR, with guaranteed sale within 14 days. While this strategy pushes customers to find equivalent bikes, it also tells customers that they have got value for money.

This is an important unique selling point for CredR, helping the company amass 5,000 satisfied customers in its first year of operation. CredR delivers excellent customer support as well. "The company connects customer with the support officials under 2 hours of complaint submission." said Sumit Chhazed.

Campus initiative

In just two years, CredR has sold over 25,000 bikes all pre-owned, properly verified and listed on their site for purchase. In the last year, the conversion of marketing leads into sales soared from 31% to a prodigious 45%. CredR receives about 1,000 requests in a day to buy/sell pre-owned automobiles. Currently, CredR operates in just the three cities of Mumbai, Bangalore and Pune. The company plans to expand its operation to six other cities in the current year, having already started in Delhi recently.

Encouraged by the success, the company has introduced a unique referral program named Captain Campus. This was started in several colleges in Pune. Students who enrolled were requested to refer likely buyers to CredR. The program is designed to share incentives with both the buyer and the person who refers using the website. In just two weeks time, more than 450 students had joined the program, leading to a huge increase in sales. Referees get Rs. 1,500 for each bike sold. In addition they can win prizes up to Rs. 75,000. On referral of the thirtieth bike, the student wins a bike worth Rs. 30,000 while a trip to Bangkok is thrown in, on the reference of the fiftieth bike. The breath taking response to this program means that CredR now plans to begin the program in other cities as well.

Looking forward

The market for used bikes in India is valued at $12 billion, with nearly 15 million pre-owned bikes changing hands every year. The company currently employs 180 people, while sales has grown 300% on a monthly basis.

"We are overwhelmed with the phenomenal response received from our patrons, across markets. Increasingly, we are looking at strengthening our approach towards listing verified and tested bikes for buyers. Our Captain Campus initiative, along with the exclusive services offered by CredR, has been as a catalyst in enhancing the overall experience of buyers and sellers of used bikes. This will help us build trust amongst our valued patrons, and thereby, increase our customer-base across markets in India," Sumit Chhazed says.

The sheer energy of the young entrepreneurs, combined with the maturity of thinking of GrowthStory, is a sure recipe for big time success. There is little doubt that in the years to come this innovative enterprise will blaze new trails in its chosen niche market.

Takeaways for us

There are generic marketplaces like Olx and Quikr which allow you to sell and buy any used item. But what Cred R has done is to clearly establish the space for specialist market places which understand the domain very well and cater to consumers' needs in that domain perfectly.

There are lessons for us here in the financial intermediation space. Cred R brings in an element of trust though a rigourous transparent approach that is easy to understand and relate to. Trust is what financial intermediation is all about - and trust has historically been won over time, one client at a time, through deep personal relationships. Trust - as Cred R has shown - can also be earned by demonstrating a rigourous transparent approach towards advice - which is easy to understand and relate to. If you can win trust through such an online proposition, you have a winning intermediation model that can cater to India's rapidly growing investor base. Food for thought for all financial intermediaries.

Content is created by Wealth Forum and must not be construed as an opinion by Reliance Mutual Fund.

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