Last year, Daybat evaluated the performance of different real estate players in several countries including Idealista vs Fotocasa in Spain and Immoscout24 in Germany.
We never anticipated that we would move quickly into a different category, but the fact that the virtual marketplace Wallapop has demonstrated unbeatable leadership in its focus on the automotive sector and is beginning to compete against Schibsted's automotive sites lead us to start evaluating this segment in Spain.
What we found was truly engaging and even fascinating. Several of the interactions that we’ve had with investors and industry players covering the whole western classified world from hedge funds to the private equity industry, indicates to us that many people are interested in learning more about the automotive classifieds game in Spain.
What is at stake?
The car stakes in Spain are very big. Why? Because the automotive segment is the first category that Wallapop (a very strong C2C mobile native e-commerce app) is trying to monetize against a very well established player like Schibsted. If Wallapop is able to crack Schibsted’s position and capture relevant revenue then it will send very encouraging or worrying signals (depending on which side of the fence you are) to the world. Not only to Schibsted's sites that focus on the automotive sector such as (Coches.net/Milanuncios) but to several other global contenders like Letgo, Offerup or Carousell.
What is the current status of development?
Based on what we have learnt at Daybat in the last couple of months, the moment of truth is coming. It appears that investors on the Wallapop board are slowly becoming more anxious, as after four years they need to see Wallapop gain monetization potential.
On the Schibsted side, and given the recent changes in senior management in Spain, it also appears that this period is critical. Why is it critical for Schibsted? Due to Wallapop’s current business model.
We have evaluated the four leading car players in Spain:
*Sections marked in yellow signify some variables for Wallapop where we had to make estimates. Over the last few months it seems that Wallapop has been using two car publishing systems which were not easy to track.
Coches.net vs Wallapop
We focus our analysis in comparing Wallapop to Coches.net as that is where the most intense rivalry is happening.
In terms of private vs professional-dealer cars, Wallapop does not differentiate sellers. But we estimate that around 120,000 cars in Wallapop are private, and 90,000 are dealer cars. That almost matches Coches.net 96,635 dealer cars. Well done Wallapop for just a few months working with dealers and a clearly sub-optimal app for B2C use. And then Wallapop doubles the private cars available, 120,000 vs 63,624 for Coches.net.
This is very relevant as neither of these players charge private sellers. So Wallapop has a stronger position in the base of the car sellers’ pyramid: in cheaper, older cars, sold by younger less affluent sellers. That is the more fragmented, more difficult to capture sellers’ population. And with that, positioning in cheaper more affordable cars it appears that Wallapop is attracting buyers at a very significant volume.
Quality of content
Wallapop is the only player where it appears as though the quality of the content is lower but we think this is due to the reasons we have outlined (*see Wallapop data above) and not the content itself. We expect this will clear up slowly over time. The content displayed by Schibsted and Autoscout24.es we think is very good for its users.
Registration data: Selling older cars
Dealers by definition sell more recent cars. Therefore portals like Coches.net and Autoscout24.es who focus more on dealers have fewer old cars. And they are both strikingly consistent, 30% to 35% from 2014 onwards and 38% and 39% from 2007- 2013. Autoscout24 is skewed towards more expensive ‘younger’ cars.
Within the horizontals, very similar patterns between themselves. Majority of cars registered before 2006, 52% for Milanuncios, 61% for Wallapop. For ‘younger’ cars, also a similar weight in both portals. For the registration period 2007-2013, Milanuncios 32%, Wallapop 28% and for 2014 onwards, Milanuncios 12%, Wallapop 11%.
Schibsted knows Wallapop is catching up
At the end of 2016, Schibsted posted analytics on their website that drew attention to the fact Wallapop’s audience was and is very big.
For Wallapop to take advantage of its position over Schibsted, it really needs to focus on a few key areas, here are our observations:
This is the summary page of Spain, Schibsted Q1 2017 report.
The Cars sector in Spain is at a very relevant point in its evolution. Wallapop has been acquiring highly relevant and significant car listings, especially in the price-sensitive mass market (in the base of the buyers pyramid). Schibsted, after a long period of restriction is now ready to use its power to react to Wallapop’s threat with both Coches.net high quality inventory and strong relationship and the broad, very appealing Millanuncios offering.
Autoscout24.es has a weaker position than Coches.net but presents an attractive range of cars for the top end of the market. The content of all portals is of high quality.
So the battle is going to be played out on the monetisation front, not on the content front. Wallapop’s efforts to monetise are focused lately more on capturing value from the bulk of users, for example, its in-app payment service Wallapay, than in their former approach of charging additional for preferential visibility (probably to dealers).