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19 Sep '13

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Radhika Koppanur is a registered dietitian. Her expertise is in areas of diabetes management and nutritional biochemistry.

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Market segmentation is a great strategy for uncovering business opportunities and building profitable businesses. Zoom Car India Private Ltd. Is a perfect case of a business that is built by uncovering unmet needs in an established market segment and positioning the business

Zoom Creates Self Drive Car Market Segment in India

Greg Moran_Zoom CarMarket segmentation is a powerful strategy for uncovering business opportunities and building profitable businesses.

Zoom Car India Private Ltd. is a perfect case of a business that is built by uncovering unmet needs in an established mobility market segment and positioning the business as a leader in  the newly created self drive car market segment.

Vyapaari spoke with Mr. Greg Moran, Co-Founder and CEO of Zoom to find out about Zoom¹s plans for the nascent self-drive car rental service in India.

Vyapaari: Pls. introduce yourself and other co-founders to our readers.

Greg Moran: I’m an American originally from New York City.  I attended the University of Pennsylvania and passed out in 2007 with a degree in International Relations.  My academic focus was on India and China so my passion for India goes back a long way.  It was at Penn where I met my co-founder, David.   We met in 2003 and have been friends for 10 years.

Post Penn, I moved back to New York and worked in the energy sector with a focus on renewable energy and sustainable infrastructure.  I spent over 4 years working in investment banking, corporate development, and energy investing before returning to business school to pursue my MBA.  I completed one year at the USC Marshall School of Business before taking a leave of absence to pursue Zoom full-time and move to India.

David’s background after Penn included work at a cleantech startup and a policy thinktank.  He then attended Harvard Law School where he earned his degree.  Post Harvard, David attended the Judge School of Business at Cambridge where he took a leave of absence after just one semester to pursue Zoom full-time.

Vyapaari: We are keen to know motivations and inspirations behind conceptual- ization of Zoom Car.

Greg Moran: David and I both came at it from different perspectives.  My passion was always around sustainable infrastructure, particularly within large cities.  In addition to studying India at university, I also was fortunate enough to work on some large-scale projects in India while in the energy space.  This provided me unique insight into some of the challenges faced by Indian cities as it related to infrastructure.

David was an ardent believer in the car sharing business model as he had been a member of Zipcar (largest such organization in the US) for several years.  It immediately clicked with both of us that the opportunity in India was ripe for car-sharing and we were both crazy enough to actually run with it and take the entrepreneurial leap!  This a-ha moment was in December 2010 and we haven’t looked back since.

Vyapaari: What made you choose Bengaluru as the preferred destination for realizing your business idea?

Greg Moran: Bangalore was really the ideal choice to launch the car sharing business model (self-drive car hire).  The primary reasons were:

  • Well educated population with tons of local graduate universities
  • Significant percentage of individuals who have lived abroad and have similar business model (Zipcar, Hertz, Avis, etc.)
  • Substantial amount of people from States outside Karnataka and therefore, don’t have access to family with car
  • Primary tech city in India with the most early adopters and the highest acceptance for new concepts
  • Built infrastructure that has a high number of gated societies that provide for secure vehicle siting opportunities in various geographies across the city (easier to scale in the beginning)
  • Low vehicle ownership rates as fewer than 15% of households own a vehicle

Vyapaari: What is Zoom Car?

Greg Moran: Zoom is India’s first (and only) 100% self-drive car hire service.  We’re membership based and we allow individuals to rent cars by the hour or by the day.  We offer the Ford Figo, Mahindra Scorpio, BMW 3 Series, and the Mahindra Reva.  We have sedan offerings coming soon.

We’re the first company in India to offer a plug in electric vehicle for hire and we’re also the first company in India to offer a luxury vehicle for self-drive by the hour.

Vyapaari: You are in the mobility market space.  In Bengaluru, there are already several established modes of transportation in place such as vehicle ownership, taxi services, rental car services, public transportation services.  What specific unmet needs did you see that you are in the process of addressing with Zoom Cars?

Greg Moran: We’ve found that there are several lakhs of individuals who could likely afford a car in Bangalore, but choose not to own a vehicle.  This behavior is largely present because many businesses (particularly large tech companies) will provide employees with free daily transportation by way of bus or Tata Indica.  This means that the employees don’t need to drive to work.  Most individuals don’t see the economic value in owning a car if they will only use it a few times per month.  We find that it makes a great deal of sense to rely on employee transport and then own a two wheeler for other routine trips.  For the 1-2 times per month that you would require a vehicle, Zoom is there waiting to meet the need.  This demographic tends to be 25-35, usually male.

The other large gap in the market that we’re filling is with individuals who live in multi-generational families.  In most cases, these larger families will have 4-5 members who have driving licenses, however the family will only have 1-3 cars.  This means that on a few occasions per month, someone who really wants to drive will not be able to get behind the wheel.  Economically, it obviously doesn’t make sense to purchase this additional vehicle for such limited use, so Zoom steps in to fill the void.

Our service also appeals very strongly to individuals who own a small vehicle (e.g. Hyundai i10), but would like access to an SUV or a similarly large vehicle every once and a while.  These instances would primarily be for outstation use.

Vyapaari: From your bios, we noticed that you past work focus areas were sustainable development and energy.  Is Zoom Cars a beginning to something big?  Is so, can you share your vision?

Greg Moran: We have very large aspirations for where Zoom can be in a few years. Our goal is to be in 20 cities across India within 3 years.  This would mean having a total fleet size of over 6,000 vehicles.  We think it’s definitely attainable, but we certainly have a long way to go.  The idea of having a self-drive car on demand anywhere in a major Indian city is what keeps us going.  It’s a huge challenge, but it’s incredibly exciting at the same time.

Vyapaari: How did you validate the need in the market place before launching Zoom Cars? How long and elaborate was your validation process?

Greg Moran: We did over 12 months of intensive market research along with other forms of diligence to help validate the idea.  That said, you really can’t truly validate and test a hypothesis before actually launching the product or service!  We’ve been live now for nearly 7 months and the reception has been phenomenal.

Vyapaari: What is the demographic of your target customer? What are the primary motivations (convenience, price, feeling of ownership, environment consciousness etc.)

Greg Moran: We believe that our primary value proposition is one of convenience and flexibility.  We don’t necessarily seek to compete on price, but we’re confident that we offer our customer great value for all the services and extra touches that we provide.   It’s really about creating an unbelievable customer experience from end to end.

The environmental consciousness is not something we’ve played up to date, but we’re beginning to see that manifest itself more with the addition of the Reva to the fleet.  In general, it’s much tougher to appeal to the Indian consumer by going the environmental route.

Similarly, the feeling of ownership hasn’t exactly been one that’s been prominent since our February launch.  Our customers have really embraced the idea of collaborative consumption.

Vyapaari: You have operational for few months.  What insights did you gather on usage patterns, average KM’s driven, average number of hours rented etc.? Did the data validate your design intent of Zoom Cars being hyper local?

Greg Moran: I can’t share specific figures here, but what I can say is that we’ve had a great degree of variety around the type of trip.  At present, we’re seeing aggressive demand for vehicles both by the hour and by the day and we expect to see this variety in usage continue for the foreseeable future.   Regarding our hyper locale siting, our members have repeatedly voiced excitement whenever we launch a new location since that means that we will just be that much closer to more of our members.   Our goal is to have 20+ locations across Bangalore by early 2014.

Vyapaari: Tell us about the make up of Zoom Car fleet and number of cars.  Any specific insights that you can share on makeup of the fleet (petrol, diesel, electric, hybrid).

Greg Moran: We have 42 cars on the road today and we will have 52 cars in our fleet before the end of the month.  Breakout is 22 Figos, 17 Scorpios, 2 BMWs, 1 Reva, (10 VW Ventos coming soon).  Everything is diesel with the exception of the Reva. All cars are manual transmission with the exception of the BMWs and the Reva.  Please check out our website for more details.

Vyapaari: How many employees currently support operations of Zoom Car?

Greg Moran: We have 35 employees today and we’re currently hiring!  Show us what you got at careers@zoomcar.in.   In particular, we will be adding to our core engineering team over the coming months.

Vyapaari: Share with us the process of renting a Zoom Car and also tell about the services that are offered.

Greg Moran: The process is very straightforward.  Simply visit our website or download our mobile app (iOS or Android) and sign up by entering your name, email, and mobile number.  From there, simply upload an image of your original driver’s license and you’re all set to book.  You can book a vehicle by the hour or by the day from any of our 5 locations.  All bookings take place on the website or through our mobile app and payment is made upfront through either credit or debit card.  That’s all there is to it.

Vyapaari: What marketing channels are you using to tell the market about Zoom Cars?

Greg Moran: We use a combination of offline and online marketing.  We like to stay focused on building a strong community so we will be focusing even more closely on putting on intimate neighborhood events in the coming months.

Vyapaari: What challenges did you have to tackle in the process of launching Zoom Cars in India? How did you address them?

Greg Moran: There has been a litany of challenges in launching Zoom.  Our industry is very tightly regulated and working through the various regulations and requirements was a very arduous process.  We’re thankful to have a great local partner in Ramesh Tours and Travels.  We operate under a partnership agreement that has been very helpful as we’ve kicked off the business here in Bangalore.  Ramesh has been in the business for nearly 15 years so he has a wealth of operational expertise that we can lean upon.

Vyapaari: What milestones are you planning to hit in the next 2 years?

Greg Moran: Our goal is to hit 10+ cities and add more than 3,500 cars to our fleet.  Our longer term goal is to serve nearly 1 million customers within 4 years.

Vyapaari: To the current pressures such as population growth, pollution, hyper urbanization, increasing consumer spending etc. in developing economies, what mobility innovations are needed?  What innovations are in pipeline?

Greg Moran: India faces unique challenges that many more developed nations don’t face.  Given the rather abysmal condition of most Indian infrastructure, I would say that what’s needed the most is basic investment on the part of the government.  Knowing full well that this may take some time, I would make the case for a stronger focus on addressing wait times and other inefficiencies in the system.  The radio taxi companies are starting to do this, but we have a long way to go as an ecosystem.  Hopefully, the entrance of Uber will also help on this front.

Stay tuned as Zoom is hoping to roll out some exciting new services in 2014!

Vyapaari: We wish you success. Mr. Greg, Thank you for your time.

We hope you have enjoyed the discussion. Please give us a like, a tweet and share the story with your friends.

About Radhika Koppanur

Radhika Koppanur is a registered dietitian. Her expertise is in areas of diabetes management and nutritional biochemistry.

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