Online car rental startups vroom [DNA : Daily News & Analysis (India)]
(DNA : Daily News & Analysis (India) Via Acquire Media NewsEdge) "Bangalore: The online car rental industry is on an accelerator mode, with new startups trying to grab a piece of the $10 billion cab market pie.
Despite the e-commerce sector struggling to gain momentum, the Indian online car rental industry is growing at a rate of 25% year-on-year. The segment has been attracting investments from not only angel investors but venture capitalists as well. This, in turn, has made the industry a lucrative venture for start-up firms and entrepreneurs. The car rental market which stands at $10 billion in the $ 25 billion travel sector is poised to see a steep growth in the coming years.
In the past three years, startups like Ola Cabs, TaxiForSure, Zoom, Savaar, Getmecab, Avisi etc have made a name for themselves. "The industry is booming like anything, and there is an opportunity for everyone. Of course, there will be a few leaders in the space, but there is ample opportunity for startups in this segment. Their key to success will be the differentiating factor as older players like us will have the advantage," says Ananth Subramanian, head, corporate communications, Ola Cabs, a two-year-old startup.
The entry of start-up firms into this segment has not only boosted the online travel segment which presently contributes 71% of the total consumer e-commerce transactions but it has also helped generate interest among investors as well. So, what exactly has led to such a humongous growth?
"Due to the increase in standard of living, more and more people are opting to hire chauffeur driven cars to commute since comfort and style have started playing a major role. Although there are many players that are entering the car rental space, 96% of the market is unorganised," says Gaurav Aggarwal, founder and CEO, Savaari Car Rentals.
"It is sheer convenience that makes customers go for known brands than local cabs. Right from metre to safety to timing, everything is in order when you book a cab online from a known brand. You know for a fact that the chances of your booking getting cancelled is minimal," says Sakshi Vij, executive director, Carzonrent.
Also, the rise of internet usage and availability of high end tech devices (tablets, phablets, smartphones etc.) are augmenting this demand. India is being termed the feature phone nation as the smart-phone and tablet revenue is growing bigger than the entire consumer electronics market. It's a fact that India's netizens which is at 243 million is set to be world's second-biggest internet user base and would surpass US' by June 2014 (reports IAMAI).
Though majority of the market is still unorganised and hence untapped, chances of new companies coming in this space and making it big is difficult, says Aprameya Radhakrishna, founder and director, TaxiForSure. "One has to differentiate in order to succeed as established players in the business have their own loyal customers. Otherwise, companies do not survive beyond a few months," says Radhakrishna.
Vij, however, differs. "The opportunities are aplenty. Yes, companies entering now will have to differentiate. But, this will be true for all industries. I feel the market is far from saturation."
Credit:Suparna Goswami Bhattacharya
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