Carwow is one of those business success stories that invite us to take a close look at its strategies. It only took a few years for the company to become a huge success in the United Kingdom before it became a major international company.
Today, Carwow is the ideal solution for those who want to buy a new vehicle, but want to know all the available options to choose the one that best fits the budget.
What is Carwow?
In short, we can say that carwow is to the automotive market what platforms like Airbnb are to the property rental market or what Booking.com is to the travel and booking business.
In other words, it is a platform dedicated to providing users with the best and most economical options available for any product or service they wish to purchase. In the case of carwow, its focus is to offer a list of the best options on specific cars, brands or dealerships.
Like the great platforms that have revolutionized many existing industries, Carwow is oriented to the digital environment. With this application, people can learn about the best offers from official and certified dealers.
Beginnings of a great success story
The history of this company began in 2010 in the United Kingdom, although its origin was different from what it represents today. When Carwow started its operations, it did so as a research platform for everything related to the automotive world, offering reviews, descriptions, presentations, comparisons and user opinions.
In 2013, it would take a generation leap with the relaunch of the platform, but it did so as a vehicle Marketplace. For this new stage, the company required a significant capital injection in early 2014. They received about $1.2 million in funding issued by Samos Investments, Episode 1 Ventures, Balderton Capital and other companies.
Funding continued to grow and by 2016 they raised $12.2 million from the venture capital firm Accel Partners who decided to bet heavily on the platform that day by day began to grow in popularity, acceptance and also in return on capital.
In 2017, Carwow begins to adopt the business model we know today and its growth was absolutely notorious. Its most recent capital injection came from Volvo Cars in 2022 who bought a smaller percentage of shares, thus becoming a minority participant.
Quality advertising: the great secret of growth
Carwow teaches us that good advertising is always important to take any company to the next level. There is no doubt that their success is due to the smart choice of taking the opportunity to create a service that many needed without even knowing it, but it is also due to their excellent way of presenting themselves to the public through advertising campaigns.
Since 2012, when venture capital funding started to get higher and higher, much of the budget was spent on increasingly ambitious campaigns, by 2015 they launched a TV campaign on major UK TV stations at a cost of $5 million employing the voice of famed actor Michael Gambon.
Since 2021 the investment has been mainly in digital channels. Youtube is Carwow’s main advertising platform with channels in different languages, and also featuring major automotive influencers such as Dean Malay and Mat Watson.
The big idea: listening to consumers
Many times brands are only dedicated to launch one product after another, or provide many services without stopping to listen to the complaints or needs of the public. When carwow started to climb positions with its traditional Marketplace model, they had the great idea of analyzing their users in depth.
Before long, James Hind and his partners, David Santaro and Alexandra Margolis, noticed the growing negative public opinion of dealers. Among the main complaints were insistent persuasion, long lead times, below-market offers to buy or sell, and much higher offers to sell.
Added to this was the fact that it was not possible to review reviews and ratings from other users to the dealers. The perfect solution was to provide the platform with the feature that dealers were the ones who searched for users and not the other way around.
In this way, it was enough for a buyer to determine the characteristics of the car he wanted to buy for the dealers to send their best option, trying to offer the least complication at the time of the transaction and also offering a price that was attractive to both parties, thus winning the user who offered the lowest price, something called “reverse bidding”.
The ingenious reverse bidding model
This digital platform has become one of the world’s largest online marketplaces for buying and selling cars. The magic of carwow is present in the fact that it allows users to define the car they want to buy or sell, and then receive notifications about the best deals that dealers have to offer.
James Hind, founder of Carwow implemented in the platform the interesting model of “reverse bidding”, a model developed under the concept of David Paterson called “My Best Deal”, consists of creating a space or platform where the system is designed to favor the bidder who offers the lowest price.
How does Carwow work?
To understand how carwow works, it is important to know that its system is focused on simplifying the process of buying or selling cars by users, for which the platform puts itself in the negotiation chair to create a smooth and fast process.
When a user enters the carwow platform for his or her country, he or she must select the car model and provide other information of interest such as engine, modifications, maintenance and other data. They must also enter their e-mail address where they will receive notifications from other users interested in a car with such characteristics.
During this process, Carwow is in charge of corroborating that the data and characteristics of the offered car are real, in addition to determining that the interested buyer does not have any limitations that may frustrate the negotiation. In this way, Carwow facilitates the transaction channel providing convenient guarantees for each party.
Carwow’s differential value
From the users’ perspective, the platform is a great option to buy or sell a vehicle in an agile, simple way and always getting the best possible price. From the dealers’ perspective, it is a great opportunity to open up to a much wider market.
It is also worth noting that the company is focused on providing a digital platform, but working hand in hand with structures and physical dealers authorized by the brand to perform evaluations of vehicles advertised within the system. In this way, it manages to provide security and confidence.
Something that is also very interesting about carwow is that the platform leaves vehicle reviews and opinions aside, instead, all reviews and comments are focused on the experience provided by each authorized dealer.
What carwow has achieved with this initiative is to increase competitiveness among dealers and this in turn generates a very favorable ecosystem for individuals. However, not everything is focused only on providing benefits to users, dealers also benefit greatly from being allied to carwow.
The main benefit for dealers is the expansion of demand within the market, and the guarantees and trust that have positioned carwow as a leader in the car buying and selling market is reason enough to have a huge database of users willing to negotiate.
Integration into the digital era is another of the great advantages that carwow provides to dealers. The company has a consulting department dedicated exclusively to helping dealers to integrate and make the best use of the virtues offered by digital platforms.
Of course, the increased inventory flow is a benefit that cannot go unmentioned. With the ability to sell and buy many more vehicles, dealers can make their inventory flow much smoother, thus avoiding devaluations of some vehicles or high maintenance expenses while waiting for a buyer for a car.
Frequently asked questions about carwow
Can anyone sell a vehicle on carwow?
Any user can publish a purchase or sale request, but to do so, he/she must first comply with a verification process. This process is more rigorous in the case of dealers.
How long does it take to receive payment for a sale?
Generally, after selling a vehicle to a buyer, the seller receives payment within 24 hours.
How can I know the price of my vehicle?
In carwow’s automatic appraiser, you can find out the current value of your car. Fill out a form with questions and specifications of the vehicle, include some photos and in a few minutes you will receive a quote for the car in t