Considering that the Egyptian pound has lost nearly a quarter of its value against the greenback since the start of 2022, as the country’s auto market suffers from the same inflationary pressures and supply chain issues as the rest of the world , there has never been an increased need for auto financing.
This, coupled with traditionally limited options in Egypt for those looking to finance a new purchase, has created a ripe opportunity for online used car retailers like Carzami.
As co-founder and CPO of the company Adham Hosni People who previously could have paid cash up front are increasingly turning to used car market operators to finance their car purchases, PYMNTS told PYMNTS.
“If you’re used to driving a Mercedes, you won’t want to buy a Honda,” he said, adding that finance solutions allow Egyptians to buy whatever vehicle they want despite a general slump economy.
To create this opportunity, Carzami partnered with one of its earliest investors, the nation’s largest vehicle financier – Contact Financial.
While Contact typically works with physical dealerships, the relationship with Carzami has created an opportunity to launch a unique digital financing solution. Hosny added that the platform was even able to offer financing with as little as 10% down payment, lower than Contact’s in-person offerings.
Although he said some people will still want to visit a physical showroom, Hosny is optimistic about the potential of online platforms like Carzami to gain market share, pointing out that younger shoppers in their late 20s and in their early thirties are particularly open to the concept.
Before launching the platform, he said Carzami’s founders considered various possible business models, including hybrid models incorporating in-person and online sales.
Ultimately, however, he said they opted for a “pure digital” approach, adding that platforms that opt to maintain a physical showroom tend to miss out on gains. efficiency to be gained from the pure line proposal.
Going the other way, he said traditional dealerships looking to branch out into online sales channels will struggle to compete with native digital platforms.
“You can’t hold the stick in the middle,” he noted, speculating that existing hybrid solutions will have to choose whether to focus on digital or physical sales at some point.
The future of online car sales
Reviewing the global automotive e-commerce landscape, Hosny said different players are all trying to do the same thing in their respective markets: “All of these platforms – Carvana, Cazoo, Kavak – are looking to create a better digital shopping experience.” , did he declare. said.
He acknowledged, however, that online platforms still lack the in-person car buying experience that consumers want. But there are innovative ways to address this challenge, including using technology to create a more immersive view of vehicles for sale.
Carzami is already experimenting with virtual reality, for example, a technology that Hosny says could solve the depth perception problem that deters many people from buying a car without seeing it in person first. “The technology isn’t quite there, but it will be,” he added.
Stressing that a photo can never be a good indicator of the depth of a chest, for example, Hosny said Carzami has invested in getting as close to a 3D representation as possible, as a two-dimensional screen allows.
Until the day when car buyers can shop in a metaverse 3D virtual showroom, platforms like Carzami have to make do with interactive 360° images.
In the meantime, Hosny said Carzami is focused on his next fundraiser and building up his stock, which he buys from a mix of dealers and owners.
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