The deal for eBay Classifieds Group (eCG) through Gumtree, to acquire CarsGuide Autotrader Media Solutions (CAMS) was finalised in June.
To find out more about the acquisition, and what it means for the future of Australia’s automotive industry including how it will benefit both Dealers and consumers, Automotive Dealer Magazine spoke with Mark Kehoe, Gumtree’s newly appointed Managing Director, and Shaun Cornelius, CEO CarsGuide Autotrader.
Q: Starting off, congrats on your recent appointment as Gumtree’s new Managing Director, Mark! You are starting your new role at a very pivotal moment in time for ecommerce and online trading, what are your plans for Gumtree and Gumtree Cars in particular?
Mark Kehoe: Thank you! Gumtree is a pioneer of the online marketplace in Australia and I am delighted to join the business at such a crucial moment. We are currently seeing a significant shift in consumer behaviour as a result of COVID-19, as more Australians look to shop locally within their community and turn online to connect with others. We have also seen a growing number of Australians tapping into the second-hand economy by utilising our platform and there is a great opportunity to continue leveraging our leadership in this space for buyers and sellers alike.
As the business just closed the deal with CarsGuide Autotrader Media Solutions, one of my key focuses is to support the CarsGuide Autotrader team to develop one, consolidated proposition for car Dealers and commercial partners to deliver incremental value. Consumers will also have a choice between three shop windows to browse, buy and sell. This is just one step in the direction of, together, becoming the leading automotive marketplace in Australia, in line with eBay’s global vision for automotive classifieds.
Q: The acquisition will see the leading automotive platforms in Australia join forces and create a combined portfolio. What can we expect here?
Mark Kehoe: The deal will see the combined strength of Gumtree, CarsGuide.com.au and Autotrader.com.au create an attractive car-buying platform for Australian consumers. The three brands stand alone as industry leaders, known for their respective strengths: Gumtree as the #1 destination for privately listed vehicles, CarsGuide.com.au as the #1 in automotive editorial and Autotrader.com.au as the #2 for Dealer network customers. By harnessing their collective strengths, the acquisition will create a comprehensive automotive ecosystem for Dealers providing more reach, insights and tools.
Shaun Cornelius: CarsGuide Autotrader brings together quality automotive editorial content and an engaged audience of auto intenders through our leading editorial site CarsGuide, a strong Dealer customer base through Autotrader and cars specific tools and resources to support Australian car buyers and sellers. Our team has deep vertical expertise and with a combined network of Dealers over 2,500, we are excited to create a stronger automotive destination across the three brands. Along with Gumtree’s reach, insights and monthly connections, the collective will significantly benefit the Australian automotive industry.
Q: What’s the plan for integrating the three brands?
Shaun Cornelius: We are following a thoughtful and considered approach to working together in partnership. The integration of the three brands will be led by CAMs and the Gumtree Cars team, with support from global resources of eBay.
However, it will be business as usual in the short-term. We plan to retain all existing brands in the market including Gumtree, CarsGuide and Autotrader and they will maintain their own unique buyer-facing experience. Working in partnership, each brand will provide value to the market as we integrate. CarsGuide Autotrader Media Solutions is a business focused on automotive – supporting Dealers and OEMs – whereas Gumtree carries the insights and reach of multiple goods categories and is one of the leading automotive platforms for privately listed vehicles.
Mark Kehoe: By combining our strengths, we are creating a stronger automotive destination and improving our competitive edge in the Australian automotive market. The acquisition jointly positions the three platforms as a leading destination in auto classifieds. We are excited that this deal results in an even more competitive market, which is good for both Dealers and consumers.
A big priority for us is understanding the lessons adopted from eBay’s global verticalisation strategy. Specifically looking at the success of the cars category in other markets such as Canada, UK and Germany. We will then look at other opportunities for the three businesses to support each other in Australia.
Q: Speaking of eBay’s global verticalisation strategy, what long-term goals is eBay following with this acquisition?
Mark Kehoe: The deal with CarsGuide Media Solutions is a significant transaction for eCG globally. The brand seeks to cement its vision of being number one in automotive classifieds globally, and the acquisition continues the verticalisation strategy locally, that’s already being executed successfully elsewhere, including the UK. For reference – last year, eCG completed the acquisition of Motors.co.uk in the United Kingdom.
Q: What does the acquisition mean for Dealers?
Shaun Cornelius: Gumtree, CarsGuide and Autotrader will come together to create a comprehensive automotive ecosystem and a joint proposition providing more reach, insights and tools for Dealers. The joint offering provides Dealers with three shop windows to advertise and reach millions of unique buyers, a strong suite of Dealer tools providing opportunities for cross-platform synergies, as well as audience insights into prospective customers. We will also offer a larger Dealer and sales support team, working together to continue to deliver quality and quantity. Dealer support remains a main priority, as the automotive industry is working hard to recover following COVID-19 restrictions easing.
Mark Kehoe: For both users and Dealers, the combined offering provides a viable standalone option in the automotive industry. For consumers, it creates a car-buying, browsing and selling destination across the three brands and significant volume of inventory in both privately listed and Dealer listed vehicles.
Q: You just briefly touched upon the current challenges Australian Dealers are facing, as the automotive industry is trying to bounce back from COVID19. What are your predictions for the upcoming months?
Shaun Cornelius: Despite current challenges, the Australian automotive market represents a significant opportunity with 4 million cars sold per year – 3 million used cars and 1 million new cars sold. Our continued investment supports the growth opportunity we see.
COVID-19 has accelerated the trend towards digital within automotive, just as other industries have seen the importance of digitisation, car Dealers are also seeing the value it provides their businesses and need support as they evolve. Consumers are also looking for more seamless car-buying experiences, which with the power of our three brands we hope our proposition can provide.
Q: What are some of the consumer and Dealer trends you’ve been observing?
Mark Kehoe: Even during the lockdown, we’ve seen popularity in Gumtree’s automotive category, meaning Australians were still actively searching for cars online. In particular, we saw a 23.3% increase in people browsing cars and 18.9% increase in people browsing motorcycles and scooters in the second half of April, compared with the three weeks prior.
Our recent COVID-19 Consumer Sentiment Research revealed the impact COVID-19 is having on consumer car buyers’ sentiment and behaviour as restrictions start to ease. The report uncovered that 95% of Gumtree Cars buyers are still actively looking to purchase a vehicle despite COVID-19, and 87% of Gumtree Cars buyers are intending to purchase a vehicle within the next three months.
In May, Gumtree Cars Dealers experienced a +17% increase in views and +47% increase in connections compared with the same period in April.
Shaun Cornelius: Dealer leads from Autotrader are also at an all-time high in May, 36% higher than pre-COVID-19 levels (Feb 2020).
Mark Kehoe: Overall, it seems would-be buyers are embracing online like never before, whilst those Dealers who are accelerating digitalisation are set to reap the rewards of this burgeoning consumer trend.