Singapore automotive marketplace Carro is betting big that the subscription economy is ready to disrupt the automotive industry
Would you pay a monthly fee for a service that allowed you to hop from car-to-car on a monthly basis without having to worry about maintenance and road tax?
Singapore’s Carro, Southeast Asia’s largest automotive marketplace, reckons there is ample appetite in the city-state, so much, in fact, that the company launched its “Netflix for Cars” in March this year.
The service is the latest spin-off for the platform, which since launching in 2015 has expanded into insurance brokerage, roadside assistance, and an expedited service that completes sales in 60 minutes.
Although more than $500 million worth of vehicles were sold on Carro’s platform last year, the company is not resting on its laurels. Instead it’s betting big that the subscription economy is ready to disrupt the automotive industry — and it wants to be in pole position.
Leasing vs. subscription
Compared to traditional leasing, that doesn’t cover road tax and maintenance costs and ties you down to one car, Carro’s service aims to make switching between cars as easy as flicking between TV shows, by taking care of these overheads, jettisoning the lengthy leasing contracts and allowing users to switch cars for different occasions. Autophiles can also complete the entire process online without leaving their homes.
This flexibility means subscribers can temporarily cancel the service for a month if they go on holiday. Or in the case of Singapore, which has a large migrant population, it enables workers to activate a subscription for their period of residence and employment.
The service is a gamechanger for the automotive industry, which analysts have previously considered immune to the encroachment of the subscription economy, citing the relative affordability of traditional leasing.
Not for the first time, analysts underestimated at-scale eCommerce’s ability to rip up the rulebook. Carro’s newly-launched subscription service already matches conventional leasing rates, making the former an increasingly unattractive option to millennials eager for more transportation flexibility.
Manisha Seewal, group chief marketing officer at Carro and speaker at this year’s Technology for Marketing in Singapore, spearheaded the company’s subscription-based service. She says the company decided to launch the service after observing common pain points faced by car owners and the popularity of services like Netflix and Spotify.
“We saw this as a significant opportunity,” she says. “Especially with Singapore being one of the most internet-savvy nations in the world, one that is comfortable in delving into disruptive solutions to overcome long-standing burdens.”
“As a company, we are tech-first and as such, are always on the lookout to see how we can disrupt services. It’s just part of our DNA.”
According to a 2018 Zuora and Harris Poll study, 38 percent of Singaporeans said they would increase their use of subscription services in the next few years, which are attracting millennials by the millions, as they seek purchasing flexibility and convenience and resist investments that do not retain value.