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How Vroom is Building an End-to-End Platform for Vehicle Services in Bangladesh

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Sep 2, 2021

Vehicle owners in Bangladesh, both individuals and companies, suffer from many maladies. Quality workshops are insufficient. Standardization is non-existent. Approximately 75% of car owners think workshops overcharge them and that repair quality is poor. Nearly as many owners find it difficult to visit a workshop to get regular car maintenance done. On-demand vehicle maintenance services remain scarce. If your car stops in the middle of the road, it can be difficult to find a solution. 

A majority of vehicle owners are aware of fuel pilferage, but effective solutions to this problem are few and far between. 

The process of buying used or reconditioned cars is not easy. From sourcing to pre-checking to handling documentation, it is a journey full of its own challenges. There are a few online platforms where you can buy and sell reconditioned cars, but no dedicated platform exists.

Companies that have fleets have major pains. Fuel pilferage and maintenance problems exist. Often, these companies spend almost three times what they should. Challenges arise daily. Optimization appears impossible. You want a bird's eye view of your vehicles throughout the day, but it is often unattainable. Furthermore, if you run your vehicles across the country, maintaining them requires dealing with multiple workshops, vendors, and so on.

In a nutshell, vehicle ownership and maintenance is often an unpleasant and expensive experience for most individuals and businesses. 

These are complex interconnected challenges and demand comprehensive solutions. This is where Vroom, a 360-degree online platform for vehicle services, comes in. Using a combination of technology, data, and innovation, Vroom has been striving to solve these problems for the past three years. 

Vroom started out in 2017 as an on-demand at-home car wash and polish service. It has since expanded to cover almost all vehicle services, including reconditioned cars buy/sell, on-demand wash and polish, maintenance, fleet management, and everything vehicle-related. Today, you can conveniently call Vroom a complete vehicle services platform. 

Nazeem A Choudhury, Co-founder and Executive Director, Vroom Services
Nazeem A Choudhury, Co-founder and Executive Director, Vroom Services

The origin of Vroom

The idea for Vroom came from the personal challenges of its founders. 

“Some of my friends were discussing the challenges of sending one's car to repair shops and subsequently having quality issues, plus being worried that it wouldn't be handled safely and properly,” says Nazeem A Choudhury, Co-founder and Executive Director of Vroom Services. “We discussed that it would have been great if there was a company that could manage everything for us." 

The casual discussion eventually turned serious. Everyone in the group agreed that it is a promising idea. After much deliberation, debate, and planning, Vroom was born in 2017. 

"We selected the name Vroom because it is the first word a child learns related to vehicles," Nazeem says. “The vroom vroom sound of a car is special to us. We wanted this service and company to be equally close to the heart of every car owner.”  

Vroom’s founding team included a former banker, two seasoned management professionals, an IT graduate, and an automobile engineer and motor workshop owner. The team had the right blend of financial, technical, and management skills to crack the difficult vehicle maintenance market. The founders funded the initial operation out of their own pockets.  

However, the early days were not easy. Challenges came from different directions. Vroom was a relatively new concept that created some challenges with potential partners who provided offline services and viewed it as a competitor. Customers were not familiar with at-home wash and polish services. 

“Although many people appreciated our at-home car wash and polish service concept, we didn't generate any sales during those first weeks," says Nazeem. This was a paradox to the Vroom team. “Since the solution was inspired by our own problem, we expected everyone to be equally excited about adopting it. When that didn't happen, it was a bit of a surprise." 

In the end, the predicament led to some solid insights. For services like Vroom to succeed, a behavioral shift in vehicle owners was necessary. Additionally, although car owners care for their vehicles, drivers greatly influence maintenance decisions. In fact, many drivers visit workshops of their choice for various reasons, so working with owners alone was not enough. 

"It took us some time to figure this out and remains a major challenge to date,” explains Nazeem. In those early days, word of mouth from satisfied customers helped Vroom to attract new customers. “We remain thankful to these early adopters.”

Vroom's second challenge came from logistics. To provide at-home vehicle wash and polish services, Vroom brings the washing equipment to the customer's home. Due to the large and heavy size of this washing equipment, its transportation is expensive. Eventually, the company invested in its transportation system and bought bikes for the technicians to better manage time and logistics. The logistics challenge was overcome. But a deluge of competition further complicated the situation. 

“We started promoting our videos on Facebook and YouTube,” says Nazeem. Within a few months, 3/4 new companies entered the market and started offering the same at-home service. By the end of 2018, a year after our launch, 15+ companies were offering the same services.” 

While the competition helped create awareness about the service, it also led to a price war. Many companies started offering ridiculously low prices to attract customers, which led to a decline in service quality. The dissatisfied customers generally blamed the at-home service providers as a whole. 

Vroom, however, took a different strategy. Instead of lowering the price and thus quality, the company doubled down on maintaining service standards that helped it build a strong loyal customer base.  

Vroom started out in 2017 as an on-demand at-home car wash and polish service. It has since expanded to cover almost all vehicle services, including reconditioned cars buy/sell, on-demand wash and polish, maintenance, fleet management, and everything vehicle-related. Today, you can conveniently call Vroom a complete vehicle services platform. 

Vroom
Photo by Vroom

Evolving into a platform 

As Vroom’s wash and polish service gained traction, the company began to see some other customer needs emerge. The company also realized that offering only one service would not help scale meaningfully or create a competitive moat. 

"We realized that only offering wash and polish services and maintenance would not get the company far," says Nazeem. “We could see the market opportunities as well as the risks associated with limiting ourselves to just one service. It prompted us to ask our customers what else we could do for them." 

These discussions led to new insights regarding the needs of customers. “Our analysis revealed a wide variety of needs in the market," says Nazeem. “Customers requested tracking services, genuine parts, sell/buy services, drivers, and more.”  

The Vroom team then mapped out all the requirements. An interesting finding emerged: Vroom customers were looking for services throughout their vehicle ownership journey, from purchasing a car to selling it off to all the maintenance and purchases in between. It helped the company realize the need for a 360-degree automobile solution platform: a platform to manage and offer anything and everything related to automobiles.

That’s when the second evolution of Vroom began. “The customer research made it clear what we needed to do,” says Nazeem. Throughout 2019, the Vroom team focused on creating a 360-degree platform for automobile owners, testing it, and onboarding the right partners and service providers to achieve its ultimate goal. 

Tech enables aggregation at scale. Vroom started with wash and polish service, a tiny segment within the universe of vehicle maintenance. Now vehicle owners need many other services. Vroom could easily expand to other verticals since vehicle ownership and services are integrated and the internet allows aggregation on both sides of demand and supply. To that end, wash and polish was just the entry and the beginning of demand aggregation for Vroom. 

Once the company managed to aggregate enough demand for wash and polish, launching other services and building new partnerships became easier. Vroom could offer to buy/sell service to the same customers who were taking wash and polish service before. The new service gives the existing Vroom customers yet another reason to stay with Vroom. At the same time, new services mean new customers coming for these new services. 

Most customers usually come for one service. If they are happy, they stick around and start taking other relevant services. Moreover, since vehicle services are integrated, customers are more willing to take services from one service provider they trust. The key strategic challenge for Vroom in the early days was aggregating enough demand so that it could add more services as its market power grew. Once it has built enough demand, it helped open new doors. 

This offers two benefits. One, it enables scale both for individual services as well as for the company overall. Second, once you aggregate more demands, it helps you to build more partnerships thus attracting even more demands creating a virtuous cycle of positive growth. Third, it creates a strong competitive moat. Competitors are now least relevant to Vroom’s customers unless Vroom’s service dramatically deteriorates. Demand aggregation coupled with superior customer service can create an unstoppable flywheel. 

One approach to view Vroom is that the company is building an ecosystem of vehicle services.

Vroom service team | photo by Vroom
Vroom service team | photo by Vroom

Vroom product

Over the last few years, Vroom went through a series of evolutions to reach its current business model. The company started providing services with an in-house team. Since one of Vroom's co-founders had a workshop, getting the right people with the right skill set was relatively easy. It has also elevated Vroom’s understanding of the business. “We had the ground-level knowledge and skill to run the business,” says Nazeem.   

After launching the home service business, the company then launched an app and built partnerships with workshops across Dhaka to provide services to a greater number of customers. 

“Initially, the response was excellent but soon we felt the pinch,” says Nazeem. “After visiting over 300 workshops, we found only 30 that could be called proper automobile workshops. The majority were mom and pop type, without trade licenses and proper equipment. They might serve the purpose for the moment, but I am sure the long-term life span of the vehicle had to be compromised.” 

The findings led to a change in Vroom’s model. The company cut down the number of workshops from its platform and selected only a handful of workshops to work with. Vroom today has a network of high-quality workshops on its platform and users can conveniently book and get the maintenance service. 

The company has launched a payment solution for the drivers jointly with a leading private commercial bank aimed at reducing their fuel-related cash management hassles for car owners. 

Vroom offers a sophisticated fleet management solution and vehicle tracking solution for B2B customers. Using Vroom’s solution, businesses can efficiently manage their vehicles as well as access Vroom’s other top-notch maintenance solutions priority basis. 

Today, Vroom has a web platform (and an app is in development) through which it offers comprehensive solutions to vehicle owners. “In short, whatever a vehicle-owner needs – we have it,” says Nazeem. “Most of the services we offer are fulfilled in-house. Some are catered through partners. But in all cases, Vroom is the single point of contact for customers.” 

The company, however, aims to grow further and launch more services. “We are not stopping here,” says Nazeem. “We are going to continue our product and service development journey.” 

The company says its next evolution is focused on services for electric and hybrid vehicles, a fast-evolving trend in the vehicle industry. 

Photo by Vroom
Photo by Vroom

Once the company managed to aggregate enough demand for wash and polish, launching other services and building new partnerships became easier. Vroom could offer to buy/sell service to the same customers who were taking wash and polish service before. The new service gives the existing Vroom customers yet another reason to stay with Vroom. At the same time, new services mean new customers coming for these new services. 

The state of the union 

Vroom is currently a team of 25 people. The company serves thousands of customers annually and is growing. Vroom has built an excellent product and experienced consistent growth over the past three years. Although the pandemic has slowed that growth, like every other business, it indicates a promising future for the company. 

A dedicated call center is in place for customer service. Although customers can take services online, car owners prefer to directly speak to a person. Vroom’s automobile engineers talk to the customers, understand their requirements and suggest the best possible solutions. Since Vroom has a workshop in Dhaka, it can handle any vehicle-related issue fast and efficiently without compromising quality. 

Vroom has largely grown through word of mouth. “We have not done much marketing,” says Nazeem. “Our growth comes from happy customers and references.” The company plans to double down on customer service in the coming days. “Delivering happiness is the core value of Vroom,” Nazeem explains. “From top to bottom of the company, we try to practice this.” 

The coronavirus pandemic, like many other companies, has been excruciating for Vroom. However, the company has managed to generate some consistent business to survive the pandemic. 

“We have a niche customer base who are keeping us busy during the pandemic,” says Nazeem. “Our general business, however, has declined by 50% at least. Nothing much can be done during these times. We hope the situation returns to normalcy soon.”

Vroom
Photo by Vroom

Looking ahead: the Vroom ecosystem 

One approach to view Vroom is that the company is building an ecosystem of vehicle management services. Vroom’s evolution over the last two years from an on-demand at-home wash and polish service provider to a comprehensive platform for vehicle management and maintenance services offers a trail to how the company has been laying out the seeds for a platform. 

This has also been made feasible by the industry dynamics. The vehicle is a connected industry. Paying attention to the challenges we mentioned earlier makes this reality quite clear. Offering one service essentially enables you to offer other relevant services. Vroom started with on-demand wash and polish services. As the company started to expand its wash and polish service, it came to see that its customers want and need more services. 

An excellent customer service regiment has worked as a flywheel for the company helping create a virtuous cycle. From wash and polish, the company eventually got into the reconditioned vehicles buy/sell, building a marketplace and comprehensive solution for buying and selling reconditioned vehicles. The company then moved into launching services such as selling authentic vehicle parts, an automated platform for repair services where it works workshops across cities, vehicle inspection service, ownership transfer assistance, car loans assistance in collaboration with financial institutions, fleet management solution for businesses, corporate vehicle maintenance solution, etc. 

The entire ecosystem creates a virtuous cycle of positive returns for every participant. As Vroom adds more services, quality gets better allowing it to aggregate greater demands. More demands mean Vroom partners get more orders and generate greater revenue. 

Vroom now aims to be the leader in automobile industry automation and standardization in Bangladesh. “We have aligned our products and services with that vision,” says Nazeem. Among other services, the company aims to build a nationwide network of quality workshops where clients will get the best quality auto services. “The future of automobiles is hybrids and electric vehicles,” explains Nazeem. “The current workshops and mechanics are mostly self-developed. As such the industry as a whole needs up-skilling and reskilling. Vroom wants to be in the forefront of that transformation.”

Vroom has experienced excellent growth, bootstrapping from a scrappy startup to launching multiple services, over the past several years. With its foundation built as a platform, the company now aims higher and looks to raise investment to finance its expansion.

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