How Broom taps into Indonesia’s 50 million used auto dealers
Published on August 19, 2022
On a recent episode of the Indo Tekno Podcast hosted by AC Ventures’ special advisor and venture partner Alan Hellawell, Broom founder and CEO Pandu Adi Laras discussed some unique strategies his startup is applying to reach used auto dealers across Indonesia.
Valued at more than US$50 billion in 2021, the Indonesian used car market is expected to surpass US$70 billion by 2027, growing at a CAGR of 5.74% between 2022 and 2027. But despite tremendous growth prospects, there are still some major gaps in the industry that need to be addressed.
One of the key challenges faced by local auto dealers is the difficulty involved with shifting their businesses online. Auto dealers in Indonesia still work very traditionally, with most stock counts still being done on a whiteboard. As such, they find it challenging to sell online, let alone find the right buyers near their locations.
Financing is also tough in the space due to a lack of documentation. In the archipelago, even today, auto dealers go to loan sharks for short-term working capital, and may even find themselves in a destructive cycle of debt.
This is where Broom is stepping in. In addition to helping these players sell cars and motorbikes online with less friction, the firm is also offering working capital to 50 million used auto dealers nationwide. With a bold plan to be at the center of digitizing Indonesia’s used auto dealerships, Broom locked in a US$3 million pre-seed funding round led by AC Ventures in February 2022.
Broom banks on community penetration over digital marketing
One of the main challenges that any company faces when dealing with small businesses and local dealers is market penetration. A fixed marketing template that might work in B2C, or even B2B, models for larger enterprises might not necessarily work for local auto car dealers in semi-urban Indonesia. This is where an agile and innovative approach is needed.
Broom is unlocking local networks (think WhatsApp groups, etc) to tap into the market and reach out to local auto dealers on the grassroots level.
In the past year, Broom has not invested in any sort of digital marketing campaign.
Pandu explained, “We are extremely reliant on community penetration strategies. We leverage local WhatsApp groups – most of them have 200 to 300 dealers that are actively engaging on a regular basis. We tap into these small yet active groups to reach out to our focus markets.”
Taking the outreach to another level, Broom frequently conducts dealer gatherings across Indonesian cities. These events are held in neighborhoods where groups of dealers live. During these gatherings, Broom engages with community leaders who in turn bring their peers to the platform.
Pandu added, “We have managed to onboard around 3,000 dealerships in the Jabodetabek (Jakarta metro) area with this approach.”