Droom: An Online Platform for Pre-Owned Automobiles
Droom Technology Private Limited (Droom), a used-automobile marketplace platform based in India, had identified a big-ticket item with an average selling price of 200,000- 600,000 and harnessed its innovative technology to build an online ecosystem. In doing so, it had stayed clear of inventory management by following a marketplace model like that used by Flipkart Internet Private Ltd. and Amazon.com, Inc. in India, bringing all participants-including used-vehicle dealers, individual buyers and sellers, and financiers-into the online marketplace. Subsequently, Droom created functional, monetary, time, and psychic values for its customers through its various automobile inspection, valuation, records search, insurance, and other services. Droom went from having a single revenue source to having six independent revenue sources through its subsidiaries, which each offered a unique combination of values and collectively created a tough barrier for competitors to penetrate. By April 2020, the start-up had enjoyed some success, but looking to increase its growth, it faced some questions: Was it offering too much for too little? Was its pricing justified by the value offered? Were its performance metrics commensurate with the value provided? Finally, what strategy would successfully shift Droom from a hybrid to a completely online model ready for listing on the Nasdaq exchange? Seema Gupta is affiliated with Indian Institute of Management Bangalore.