In 2020, online marketplace players and classified network contributed to majority share of 75% of the overall sales volume of used cars in UAE: Ken Research
1. “Go Digital:” The players in the market have realized the importance of a multichannel approach to sales.
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The United Arab Emirates has a significantly high penetration of internet users in the GCC region. This can be primarily attributed to the availability of high-speed internet at an affordable price. In 2021, there were over 10 million internet users in the United Arab Emirates and the internet penetration rate stood at over 95 percent of the total population by 2022. This has motivated players to switch their business model from offline to online models in order to offer an easy and hassle-free experience to their customers. For instance, in February 2022, Cars24 a renowned online platform launched an AI-enabled software, allowing buyers to purchase and sell cars within 30 minutes of downloading the program. Customers can also calculate their monthly EMI and track other characteristics like engine, steering, and tires.
2. “C2C in demand:” C2C Segment is Expected to Grow at over 12% CAGR During the Forecast Period.
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The customer-to-customer or C2C sale in UAE has become much easier due to rise of the social media and the internet. The market is expected to grow at a CAGR of over 10% during the forecasted period. According to Q1 2022 Global Social Commerce Market Survey, more than 68% of the consumers in the country prefer to make pre-owned cars related purchases through social media platforms such as Facebook, Instagram, and TikTok. Dubbizzle is the most popular website for selling and buying used cars from private owners. It was first launched as a Dubai-focused website but now covers all the seven emirates. Other similar websites include UAEclass, Kargal and Open Sooq. Used cars for private sale can also be found on expat forum websites such as ExpatWoman, Expat Forum, and ExpatExchange.
3. “EV in demand:” With the onset of COVID, the sellers & buyers shifted towards EV & that is expected to be seen during the forecasted period as well.
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The demand for new cars compared to used cars is expected to decrease at a massive pace in between 2020 and 2025. Since, newer cars are more expensive and the recent development in used car market wherein quality products are being offered, customers will be looking forward to spend affordable prices on used cars rather than paying hefty sums for newer brands. Also, the introduction of electric vehicles in the market will deem the newer fuel operated vehicle obsolete thereby decreasing the demand for new cars. This in turn, is temporarily expected to increase the demand for used car till the time complete shift to electric vehicle takes place. Along with that, any prospective government regulation and tax imposition on fuel operated vehicle in order to curb pollution is also expected to decrease the demand for new cars.