[Herald Interview] Mobile app brings change in used-car market

Mobile app-based start-ups offering a business platform are changing the used car market, attracting car buyers seeking a better deal.

Mobile trading is a new growth area for the used-car market in Korea, which has long been dominated by the traditional offline dealer-based transactions.

Hey Dealer is one such newly created mobile application offering O2O services to used-car buyers.

“Hey Dealer seeks to match offline used-car dealers with customers who want to sell their cars with minimal effort,” Park Jin-woo, CEO of PRND told The Korea Herald. 

Park founded the automotive aftermarket start-up and launched the Hey Dealer app in 2015. Using the app, users can sell their cars by simply uploading some photos and information about their vehicles. About 600 certified dealers then make bids on those cars.

The start-up has since notched up more than 400,000 downloads and reaped 400 million won ($337,268) in sales last year.

Despite the positive response from users, PRND was suspended for 52 days earlier this year due to government regulations. The start-up also faced opposition from offline car dealers concerned by the impact of a new type of competition.

“The negative perception toward Hey dealer has been improved as the dealers understood that they could benefit from the service as well,” Park said.

Car dealers are able to save time and energy in securing used cars via the mobile platform, which led to a rise in their income.

“About 60 percent of dealers using the Hey Dealer service have seen a 30 percent increase in their monthly income as our service helps them save on advertising costs,” he said.

He stayed positive about the future of Hey Dealer, based on the outlook for the growth of the used-car market.

According to industry sources, about 3.5 million used cars were sold or bought last year, a 5.7 percent increase from the previous year.

“The mobile platform will give a boost to sales of used cars,” Park said, adding that Hey Dealer was expecting to see deal transactions via Hey Dealer triple by the end of this year.

By Seo Jee-yeon (jyseo@heraldcorp.com), Hong Sung-pyo