A push into Latin America and recent purchase of the automotive classified websites of DeMotores in Argentina, Colombia and Chile has put carsales.com right in the driver's seat to deliver its Australian innovations to overseas markets.
The online vehicle giant posted its results for the first half of the financial year, signalling strong performance driven by domestic and international growth. Its half year underlying profit rose 5 per cent from a year earlier to $54.4 million.
Carsales.com CIO, Ajay Bhatia, told CIO there are big opportunities for the Australian company in terms of IP, technology, apps and development thanks to the massive ongoing push into Latin America.
“Some of them have already happened and now it is a matter of accelerating these opportunities into Argentina, Colombia and a few other countries,” Bhatia said.
Already, the company’s push into Mexico with Soloautos.mx and the Chilean push with Chileautos is reaping rewards with the websites.
“Having been in this industry for such a long time, there is an opportunity for us to bring the best of breed technology to them, so we deployed our retail platform, brought into Mexico and Chile. Chile went live earlier this year (in January), and the Mexican one went live late last year.
“Both of those platforms are performing really well. The metrics are looking better than they were looking before. Our technology was deployed into those countries so that was clearly demonstrable impact.”
The retail technology is cloud-based deployed onto Amazon.
“We built the development site software here. Soloautos.mx and Chileautos.com - both of those development sites have been written here in Melbourne and then deployed onto AWS in the Latin American region,” he said, explaining the technology enables product and business metrics, including measuring bounce rates for the sites, as well as conversion metrics to transactions.
In mid-December last year, the company also launched an Android app into Chile, while one was deployed in Mexico a few months earlier.
“The Chile Android app is still under beta, but we expect to remove the beta soon. The Android app is very similar to our carsales app here in Australia. In fact, we are using a lot of the code that we have written for Australia.
"It allows consumers to search for cars locally, even in the Chilean market or Mexican market. They can find the cars that are suitable for them and contact the seller through that process. It is a very similar classified app that is available here in Australia locally,” he said.
“We have also deployed our trade platform into Mexico. Our trade platform is the platform that car dealers use in Mexico to manage leads. Any leads that come from the website, end up in this trade platform.
"It is like a really small version of Salesforce for automotive dealers - a lead management platform that we have built here in Melbourne and that’s been deployed into Mexico. It will be deployed into Chile soon as and then into Argentina and Colombia.”
He said the company’s work is ongoing and not only providing great momentum domestically, but internationally.
“It is a continuation of what we’ve already been doing - having a platform that now scales globally really helps us with these acquisitions and provides economies of scale.”
When asked about the company’s next steps and focus with its latest acquisition, Bhatia said the company is mindful about localisation.
“One of the things we are conscious of is not necessarily building one website that works in Australia that is exactly the same in Chile and exactly the same in Mexico. Local markets always have certain differentiating factors. For example, one of the markets that we are in is Brazil.
"The most popular accessory for a car sold in Brazil is bulletproof windows. From a local perspective, that's important in Brazil, but it's not important in Australia. It's a serious example of the customisations that are required in the individual markets," he said.
“We’ve built our whole technology from a service architecture perspective, which allows us to localise our technology in any given market. Before we rush in to deploy these websites into Argentina and Colombia, we need to understand those markets, understand the local nuances, and then localise that into those markets."
He expects the Android app and the trade platform to also be deployed in Argentina and Colombia. “Our whole technology stack has to eventually go to all of these countries."
Bhatia said there have been a few challenges leading the technology team in the expansion overseas.
“Deployment in the cloud has not been an issue for us. What has been an issue for us is supporting these applications out of Melbourne overnight, for example. That is quite hard. From a devops perspective, 'how do we support these applications out of hours?' So some of those things have prompted us to think, ‘should we have some coverage in the Latin American region?'
“We have our technology developers in each of those countries, who help us localise the software to that country, but what we’re thinking of is 'should we have an excellence centre in that region as well that helps us bridge the gap between Latin America and Australia?'”
Staff at this centre will provide support in the region and interact with the company's development team in Melbourne.
“None of this is simply solved by having people there. We need to have people there that feel [like they] are one team. . . and they are able to back each other up. We can only do that if we start to build an excellence centre in Latin America.”
Indeed, Bhatia recognises the enormous work that lies ahead.
“At the moment, globalisation is a big, big challenge for us ... and scaling is important. To be able to scale to the number of countries that we are expanding. We are in 10 countries now and to run an operation that can service 10 countries is quite different to an operation that can service one country - so there is some scaling required.”
In terms of expansion plans in Australia, he said the company opened an office in Sydney late last year, which has 60 staff, adding to400 staff in Melbourne.
“We think we are missing out on that market at the moment and we think we should start employing developers in Sydney. In the past, we’ve had two or three developers who relocated from Melbourne to Sydney and we haven’t been able to retain them. And that hasn’t been great for us.”
The office in Sydney is largely staffed by sales people, but the company has created more space to hire developers. Currently, there are 150 IT people in the Melbourne office, but more hires are being considered given the company's rapid global expansion.
“I don’t expect it to be a very large number, because we have a very scalable platform, but expansion always requires some growth and we will definitely look at that soon.”
He said it is "exciting times" for the company and his team - particularly as he leads the IT footprint overseas.
“I have been here eight years and I’ve seen the company go from a very small one to a much larger organisation. We are listed on the stock exchange. To me, we are a large cap company, we are a multi-billion organisation, but we don’t necessarily employ tens of thousands of people. In the past, you used to have to employ 10,000 people if you were worth 1 billion or 2 billion dollars. It is no longer the case and that is enabled by the fact that technology has made businesses simpler, while making customers lives simpler as well.”
Sow what does the future hold? He said expect to see artificial intelligence (AI) on the horizon.
“One of the technologies that has a lot of promise for carsales is AI. Virtual reality is going to be good for us as well, but the practical users of it and where it starts to give us benefits in the business will take two or three years. But from an AI perspective, we will see benefit of AI to carsales in 2017.”
The company already has six projects in the AI space, which involves using open source neural networks. One big project underway, called Cyclops, involves image recognition.
“It automatically recognises images and works out if the image of the car is of the front of the car, back of the car, side of the car, the roof, the gear knob, the front seat, the back seat, the tyre, etc., so we can start to metadata all our images and better understand what is being shown in the image. The implications of where we can use it, the number of use cases is enormous.”
“The best part about this AI tool is we can not only use it in Australia, but we can use it in 10 countries.”