NAIROBI, Kenya, Jun 29 – Spurred by the rapid growth of vehicle owners subscribing to their new service that offers to sell vehicles on behalf of clients, OLX Kenya says it could roll the service to two other towns in the coming months.
The service dubbed “sell it for me” is only two months old, and uses verified OLX salespeople christened champs to sell second-hand vehicles for clients.
The champs handle the entire selling process, including transfer of vehicle ownership on behalf of a vehicle seller.
“The uptake of the service has been phenomenal. We are not only surprised by the volumes being transacted but are happy that for the first time we have a viable alternative to car sales yards across the county. People have a safe and convenient forum to choose from a variety of vehicles on offer,” said OLX Kenya Country manager Peter Ndiang’ui.
According to the online classifieds platform, 1000 vehicles are listed on OLX daily with the average time it takes to sell being one to two weeks.
Ndiang’ui says that the number of pre-owned vehicle transactions on the site has jumped, promising the possibility of churning increased revenue and creating more jobs through the new channel.
As many as 30,000 vehicles with estimated gross merchandise value of Sh24 billion are listed on the platform every month.
An interested seller wishing to use the service is required to pay a booking fee of Sh2000 to have an OLX champ matched up with them. The OLX champ then links up with the seller and agree on a selling price within which the champ will get his commission.
The champ handles the entire selling process from posting the advert to sourcing for a buyer, negotiating and finally closing the deal. Money is sent directly to OLX and once the buyer confirms receipt of the vehicle, OLX releases the money to a seller. The escrow service that allows direct deposits to OLX, now guarantees safety for the buyer.
The online pre-owned car market in Kenya has thrived over the past few years, driven by growing disposable incomes amongst the middle class and increase in penetration of internet and mobile phones enabling ease of transactions.
The potential to grow is huge, as in developed economies three pre-owned cars are sold for every new car sale. Vehicle ownership cycles too are getting shorter at three to five years from six to eight years earlier spurring more transactions.
According to industry estimates, vehicle sales business is worth Sh200 billion annually. Kenya’s per capita car ownership is three cars for every 100 people, far way below the average in most developed countries like US, UK and Germany.
Kenya imports 80,000 used vehicles every year, mostly from Japan, which is the major supplier, UK, Dubai and South Africa.
The rapid pace at which pre-owned vehicle transactions are taking place online makes automobile the favourite to emerge as the strongest and most liquid category for OLX.
Ndiang’ui said that the service is yet another addition to their platform that will make it safer and more convenient for car traders on OLX and involvement in the payment process will increase buyers’ trust when making a car purchase. In turn, this will increase the number of buyers looking for cars to their platform.
“With over 100,000 cars traded annually, at least 40 per cent find their way on OLX. It is for this reason we are placing our focus on vehicles first, which is a very key category for our business. As the “Sell It For Me” name suggests, the OLX champs will handle the entire selling process for both the buyer and the seller coupled with a seamless safe payment method.
Introduction of these two items, direct payments to OLX and OLX champs to handle selling transactions, are a definite value addition to our users who are always seeking safety and convenience when trading online. It is also important to note that those wishing to continue with hands off buying and selling on our platform are still free to do so,” said Ndiang’ui.
The service that has been rolled out in Nairobi only, has currently hired 20 verified and vetted OLX champs with vehicle experience and working directly with OLX to sell vehicles on the seller’s behalf with a verified badge on every car they post on OLX.
“We are working with car dealers who have vast selling experience and by working through OLX, they get a commission for every car deal they close on behalf of an interested seller. The verified OLX champs are also entitled to our paid adverts for more visibility as well as a verified distinctive badge that will enable them get buyers even faster. We are looking at scaling this to other major counties and are currently focusing on Nairobi only,” added Ndiang’ui.
The Sell It For Me service was first launched in OLX Nigeria where it recorded success and is now being rolled out in Kenya, to be later scaled to other sub sub-Saharan countries. Currently, OLX is in 45 countries globally.