Competition is fierce when it comes to the used car marketplace, and two major players in the Southeast Asia region are Carsome and Carro.
Both operate in the same used-car space. Both companies were founded in 2015. Both are considered unicorn startups with Singapore-headquartered Carro reportedly surpassing the billion-dollar valuation mark in June 2021. Later that year, Carsome had become Malaysia’s first unicorn.
During a fireside chat at the Tech in Asia Conference 2024 in Kuala Lumpur, Carsome’s Eric Cheng was asked by Tech in Asia’s CEO Willis Wee about his stance on the competition between his startup and Aaron Tan’s Carro.
“You’re a little more zen about competition,” Willis commented. “I want to ask, what is your approach when it comes to very fierce competition in Southeast Asia?”
Here’s what Eric had to share on the matter.
Focus on yourself
Although some might consider it to be a cop-out answer, Eric shared that instead of competing with others such as Carro, he’s more concerned about running his business.
“As long as we do our business, we run it well, then we don’t really have to worry too much about competition,” he shared.
However, oftentimes, investors may be overly concerned about competition, whether that be getting ahead of the curve or quashing competition entirely.
To that, Carsome’s CEO said, “At the end of the day, you don’t serve the investors. Yes, you have a board to report to, you have investors who invest to see the promise that you made at the very beginning. But at the end of the day, it’s the customers who you serve.”
So, that’s always been the focus, Eric said.
At this point in time, Carsome has been around for nine years. There are many startups that have tried to enter the space, and also those who came before them.
“But coming to today, a lot of them are not around anymore, or not really worth mentioning,” Eric admitted. “I think that’s really just an endorsement towards what we have been doing.”
Carsome’s CEO said that his style when it comes to maintaining a competitive edge is to just set a very high standard, and make sure that everyone lives up to it.
Negative PR is still PR
Over the years, Carro and Carsome have been positioned as rivals who are going head-to-head, Eric recognised.
During the conference, he said that he actually finds it to be good for media exposure.
“You look around in Southeast Asia, and there’s not many companies with this size, where you can have this conversation,” he mused.
He continued, “Which company doesn’t have negative PR? There’s always some negative PR here and there.”
But as a company that has been receiving this “negative PR”, yet continues to hold strong, Eric thinks Carsome (and by extension, Carro) has actually benefitted from the conversation.
In any case, he believes that Carro’s success would be a good indicator for Carsome.
For example, both companies are somewhat poised to list on the public market. If Carro—or other competitors—were to list, the Carsome team wouldn’t want to see it fail. Rather, their success would mean that the company coming after can follow their path.
If they did badly on the first listing, it’s a lot more work and due diligence that Carsome would have to do before listing.
Moreover, he believes that the success would be a good story for Southeast Asia overall.
As Eric put it, “It’s not a race.”
On joining hands with a competitor
At one point, Willis asked a hypothetical question to Eric on whether Carsome would ever merge with Carro to go for a bigger listing.
“Nothing is impossible, right?” Eric laughed. “That could be an interesting scenario.”
He admitted that it’s not something that hasn’t crossed his mind before. However, an important question to ask here is, what are the synergies you want reflected?
“Is it one plus one equals three, or one plus one equals 0.5 in terms of efficiencies?” he wondered.
Essentially, merging shouldn’t just be about creating a bigger number together, but whether there’s a multiplier effect.
Ultimately, Eric believes a serious conversation on this can only be made when the companies are in a comfortable position to logically and rationally make decisions, rather than being forced into it as a last resort.
Featured Image Credit: Carsome
