By Gilang Al Farisi
This is mainly due to the country’s economic boom and the implementation of the odd-even traffic rationing policy in Jakarta, which has prompted many city residents to buy an additional vehicle to sidestep the regulation.
The emergence of online-based automotive trading platforms, along with finance companies facilitating such sales, have also boosted growth in the industry. OLX, one of Indonesia’s largest online-based automotive trading platforms, has been reaping the benefits of this growth. Ivo Wassenaar, head of automotive at OLX Indonesia, recently spoke with GlobeAsia about the latest industry developments and how the company plans to capitalize on this.
If you work in the automotive industry, it certainly helps to be passionate about everything related to motor vehicles. Fortunately, Wassenaar has, from a young age, had a strong interest in anything on wheels. While growing up in the Netherlands, he was always curious about cars and tried to find out as much information as possible about those he happened to spot. “I have always been able to pinpoint the make and model of a car, down to the smallest detail, while growing up in the Netherlands,” he said. “Ever since I was able to own a car, I was sold on the experience of having a motor vehicle and maintaining it.”
He brought that passion into his professional career and it has served him well in developing the industry in Indonesia. Despite Indonesia’s automotive sector not being as diverse as in the West, Wassenaar believes the country has a large appetite for cars.
“Although Europe and the United States are a lot more diverse in the choice of cars you can drive, their e-commerce scene is not as massive as Indonesia’s,” he said. “E-commerce in Indonesia is larger and is still growing much more rapidly than in Europe, so development here is a lot faster due to the increasing use of mobile devices.”
Wassenaar said OLX attracts at least 5.5 million car buyers from across Indonesia every year. The most popular cars are seven-seaters, such as the Toyota Avanza, which can ascribe this popularity to reliability, price and functionality. The Honda Jazz is in second place for the same reasons, but more sought after by young mothers and college students, because of its trendier looks.
He said the trend of buying used vehicles online was expected to continue, due to Indonesia’s growing economy and its large, young population. “Young professionals are having an impact on the types of cars we sell,” he said. “Although tastes do not stray far from popular and time-tested brands such as the Toyota Avanza, we also see changes in what they prefer for a family car.” Wassenaar explained that while young people still followed the norm of having a more functional, family-sized car, a newer generation of consumers, especially in Jakarta, are more diverse in their choices. City dwellers are starting to see personal vehicles as a luxury item, as public transportation continues to improve. But this does not affect demand for used vehicles. “We still have a lot of room to facilitate sales of vehicles on our platform,” Wassenaar said. “Even though Jakarta may be crowded and demand for motor vehicles may decline in the future, we can still develop our business in other parts of Indonesia.”
The company plans to expand its presence to the entire country to become the premier online platform for used vehicle sales. “We have gone ahead and established in large cities in Indonesia; we researched local wants and needs to further improve our services and better advertise vehicles for the specific needs of the people in the region,” he said. Indonesians have become used to selling their cars online when upgrading to newer models. The process is a lot simpler than in Europe, and OLX is seeking to facilitate such transactions.
“The used car industry is currently still dominated by large dealers, but we also see small businesses gaining steam and capturing the attention of big brands,” Wassenaar said. “These small businesses may have a chance to collaborate with the big brands to both develop their businesses and maintain brand quality.” With this goal in mind, OLX hopes to build an automotive trading ecosystem to better assist buyers looking for specific vehicles. The online platform always prioritizes buyers, and it has developed services to ensure customer satisfaction. “There are several services we have developed; one of the most beneficial for buyers is providing our own certified mechanics to check the vehicles,” he said. “This gives buyers peace of mind and helps dealers become more reputable on the OLX platform.”
OLX will continue to develop its services to improve performance and assist both buyers and sellers on its platform. With growth of the Indonesian economy expected to continue and with more technology-savvy buyers who are more selective in their choices, the company is looking at a bright future.