Business Model Of Droom

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The automobile industry is considered one of the booming and evergreen sectors across the world especially in India where it holds a prominent position in the growth of the Indian economy. The industry provides useful insights into varied automobiles, automotive design, and culture of the automobile industry to the customers who are passionate about bikes and cars. As per the IBEF report (India Brand Equity Foundation), the Indian automotive industry is estimated to reach US $251.4-282.8 billion by 2026. The customer’s decision-making process is influenced by a range of factors while purchasing a vehicle like price, performance, mileage, and ratings or reviews of a particular vehicle. As the use of the internet and technology is growing rapidly for online activities including shopping, customers have also started looking for convenient online platforms for buying or selling vehicles. One such leading auto portal in India which offers an online platform in the automobile segment is Droom. This is a digital automobile platform that uses technology to enable end-to-end seller-buyer transactions of a vehicle’s sales and purchase. The holistic platform of Droom allows customers to buy or sell a huge range of vehicles as it deals with all categories of automobiles ranging from bicycle to plane and other automobile services like insurance, warranty inspection, auto loan, roadside assistance, etc. By holding 80% market share of Indian online automobile transactions, Droom has become the largest online automobile platform in India for purchasing both used and new vehicles and also, fourth largest E-commerce brand. Being AI (Artificial Intelligence) and data-science driven platform, it offers the 21st-century experience to its customers in sale and purchase transactions of vehicles. Also, customers can experience full life cycle management of vehicles and all ancillary services related to the automobile. Droom is located in more than 1000 cities in India and has 3,50,000 plus auto dealers, more than 35 million visitors monthly, and also, 6.5 million-plus followers on social media such as Facebook.

A Brief Background of Droom


 A Singapore Holding brand “Droom” which has subsidiaries in India and the U.S., started its journey by initiating a platform where the used vehicles could be purchased or sold. Droom’s headquarter is in Gurugram in India and it was founded in the year 2014 by Entrepreneur Sandeep Aggarwal by aiming at dealing with the trust factor in the online platform for used cars. Sandeep Aggarwal who is holding an MBA degree from Washington University, St. Louis is carrying 16 years of rich global experience in the internet and e-commerce sector. He has expertise in internet and technology-based strategy formulation, investment decisions, and business operations. Before putting up his shoe in entrepreneurship, he worked for approx. 12 years in Silicon Valley and Seattle. Sandeep started his entrepreneurship journey with founding a small-town based online market platform i.e., Shopclues. Today, is considered one of the largest e-commerce websites of India. After this venture and in April 2014, Sandeep observed the unorganized nature of marketplace in the Indian automobile sector and came up with an idea of launching a new market segment of online transactions for automobile place which was never used before. So, he launched Droom, which is a proven disruptive business that has given advantages of trust and attractive pricing to buyers.

Initial Journey and Further Growth

Droom’s business was started in Delhi as an online platform for used cars and expended for two-wheelers as well after 3 months. After a year, the brand’s services expanded in 100 cities across India. In another 6 months, the company started providing facilities such as road assistance, warranty, insurance, etc. Further, they extended their automobile services in 48 categories including segways, planes, bicycles, golf carts, etc.

YoY (Year-Over-Year) Growth of Droom 

  • In 2014, Droom’s inception took place in Singapore and also, it raised its 1st and 2nd round of capital funding. In the same year i.e., in November 2014, it introduced a mobile app for android phone users.
  • In 2015, the first vehicle of Droom was sold out and in the same year, it launched its website as well as the mobile app for iPhone audience. In July 2015, it raised capital funding of 3rd round. Till then, Droom had sold 100 plus orders and its onboarded sellers were also 20k.
  • In 2016, it launched a new category of vehicles, and its monthly GMV (Gross merchandise value) crossed Rs. 100 crores. Droom also received various awards for its contribution to online automobile platform i.e., Coolest start-ups award by business today, Consumer Durable and Integrated advertising campaign awards, etc.
  • In 2017, Droom secured 3rd position in the largest E-commerce companies in India with a monthly revenue of Rs. 300 crores and also, became No.1 online based auto portal.
  • In 2018, it launched its services in Singapore and Malaysia. It received an award from Silicon Review Magazine as one of the fastest-growing organizations in Asia 2017 among the top 30 organizations.
  • In 2019, it launched its services like AI Lab, ECO Lab, OBV, Droom Dashboard, My Droom, Droom My Feet, etc.

The current growth rate of Droom is 100% every year. In its total of 6 rounds of funding, the company has raised nearly $125 million in funds.

Business Model of Droom

The vigorous business model of Droom played a crucial role in its growth and success. Before discussing the business model of Droom, let us first have a look at what exactly the term Business model is. A Business Model in an organization is considered as a structure that is based on concepts that support the feasibility of a product or organization and demonstrates how an organization works, generates income, and how it moves forward to achieve its objectives. So a business model comprises all the processes and policies that an organization adopts and pursues. Peter Druker, the management guru has defined a business model as a model that is expected to explain your customer, a value that you can add-on or create for your customers and strategies you can adopt to do that at reasonable prices.

The business model of Droom consists of four categories i.e., B2C (business to customer), C2C (customer to customer), C2B (customer to business), and B2B (business to business). Most of its business i.e., around 88% is through the B2C model, C2B and C2C contribute 10%, and the remaining 2% is from the B2B business model. Now let’s discuss the above elements mentioned in the business model canvas of Droom in detail.

1. Value Proposition

In general terms, a value proposition comprises the value any company promises to provide its customers, and based on that value the customers should prefer to purchase their products or services.

  • The value proposition of Droom is unique and consists of pricing, trust, and transparency It facilitates buyers with low cost and huge selection while sellers are able to access lots of online shoppers, a complete range of e-commerce services, etc. so that they can manage their online store on their own at Droom.
  • By holding the automobile’s whole ecosystem along with other features like inspection, pricing, fintech tools, history, and marketplace; Droom has become the only auto portal all over the world in this.
  • Technology-driven features and strategies: Droom offers unique and multiple ecosystem tools and services to its customers by using the combination of advanced technology, data science, and Artificial intelligence (AI) like:
    • ECO App: This app facilitates customers of Droom to get a vehicle inspection report which is objective-based and unbiased. The vehicle’s inspection takes place on 121 points.
    • Full circle trust score: Droom provides a full circle trust score facility to the buyers to ensure that the sellers are trustworthy with whom they are dealing. It is very useful for critical trust factors i.e., verified seller, auto inspection, disclosure level by the seller, pricing attractiveness for the buyer, warranty. Buyers can do more better objective assessment while purchasing a vehicle as it consists of 4 parameters to ease decision-making i.e., Pricing score (for vehicle’s competitive pricing as per the price of similar vehicles in the market), Seller score (for seller’s genuineness, ratings, and reviews), Health score (for warranty, inspection report), and Transparency score (for seller’s listing details like number and quality of images). Sellers are forced to give maximum details of the vehicle through declaration that is its unique advantage. Buyers can also provide ratings and reviews of sellers by using the company’s rating and reviews features.
    • Orange book value (OBV): This is a pricing engine for automobiles that is introduced by Droom in India. Only Droom is the company that has initiated this feature in India first time as a pricing engine. This platform is useful for dealers and consumers in calculating the fair market price or value of used vehicles like cars, bikes, etc. This is an unbiased and data-driven tool that provides a guaranteed 100% customer satisfaction. Using this tool, consumers can also check whether the vehicle is available in the market or not.
    • Droom Discovery: This is a tool that benefits consumers with the pre-buying research facility. It provides price details, EMI calculators, expert views to facilitate prospective buyers in making vehicle purchase decisions. Also, using this tool, buyers can search any vehicle by its brand or model.
    • Droom Assist: It helps buyers by guiding in buying procedures. It is basically an online assistance tool that helps users at every step of sale or purchase of vehicles and other services.
    • Droom Credit: Using this tool, both buyers and dealers of used vehicles can take advantage of auto financing.

2. Customer Segments

The customer base of Droom is internet users or core online shoppers. In broader terms, its customer segment is divided into 4 categories i.e.,

  • Buyers: Droom caters to the need of each buyer by offering various buying options on its online platform. For smooth and harmonious transactions of buying and selling, Droom has designed four marketplace formats. It also creates a trust factor with buyers by providing supporting or ancillary services in order to enhance the buying value.
  • Sellers: The platform of Droom is very transparent and trusted where sellers can sell both used and new vehicles. It facilitates sellers to upload any number of listings and promote these to lots of internet users.
  • Enterprises: Droom customers also include various industry segments or enterprises that are into automobile-related business and it offers vertical enterprise solutions to these. Also, it provides different best advertisement solutions. The 4 divisions of Droom Enterprise solutions include Droom for BFSI, Droom for Advertisers, Droom for Fleet, and Droom for OEM.
  • Dealers: Droom provides self-service accounts for dealers i.e., StoreManager. Using this, dealers can operate and manage online business anywhere and anytime.

3. Key Partners

  • Different enterprises or business segments are key partners of Droom that include banks, OEM (original equipment manufacturers), insurance companies.
  • It has a partnership with Mahindra First Choice for providing automobile facilities and services. For insurance-related services, it is in partnership with AXA.
  • Different investors of Droom who are the main sources of its funding of USD 125 million are also its key partners i.e. Integrated Assets Management, Digital Garage, Toyota Tsusho Corporation, Lightbox, Beenos, and Beenext.

4. Key Resources

Different resources that contribute to the growth of Droom are:

  • Website: The website of the company is “” where users can buy or sell their vehicles. This is one of the major sources of Droom.
  • Technology and data science: Droom has the advantage of using advanced technology like Artificial Intelligence (AI), Machine learning, data science, and big data in its key services like customer support and creating different tools like orange book value, full circle test score, etc. These technologies are considered as the heart of the company.
  • IoT (Internet of things): Droom uses IoT to enable the ECO system for better customer services like it had launched IoT device i.e., ECO smart that is capable of tracking the performance of cars. It helps the company in influencing buyer’s decision-making as it provides more accuracy, convenience, and transparency of the health of a car’s engine.
  • Physical resources like Droom Labs: Droom labs are designed specifically to develop different world-class technology-based applications for great customer services and experiences. This includes innovating AI technology-based tools like OBV, Chatbots based on NLP, IoT based smart service, etc.
  • Manpower or staff of Droom: The Company is able to reach at such a level of growth through both its customer-centric approach and its talented, highly energetic, passionate, result-oriented team of people.

5. Key Activities

  • Marketing and promotional activities: Droom has a presence on social media platform also like Facebook, Twitter, Linkedin, etc. where it promotes and market its services and new features.
  • AI-based research for product innovations: Droom conducts research activities in its AI labs for technology-based innovations to provide better customer services.

6. Channels

Different key channels of Droom include:

  • Website: The website of Droom i.e.,, is the main channel of providing its services to consumers.
  • Social media: The company has presence over social media sites like Twitter, Facebook, LinkedIn, YouTube, etc. and it regularly updates its offers of products and services through social media.
  • Mobile App: Droom App is available for its users to see complete details of vehicles of different brands. The app has more than 8.8 million downloads.

7. Customer Relationship

  • Droom focuses on building strong customer relationships and to provide better customer support; it has an assistant tool i.e., Droom Assist. This tool facilitates bother buyers and sellers with online assistance and consulting services while purchasing vehicles in order to remove unnecessary hassle and stress.
  • With the help of data science and a unique approach, Droom supports in transactions of its customers by making them easy, fast, trustworthy, and transparent.
  • Droom Full circle trust feature supports buyers in making much better and informed decisions and by eliminating risk factors.
  • The company enhances relations with its customers by providing security for their money by using a token amount that is safe and refundable. This facility is covered under the Buyer protection services of the Droom.

 8. Revenue Streams

 Droom has generated $32 million net revenue in the year 2019 and $ 1.2 billion as GMV (gross merchandise value). There are different ways through which it earns money. It takes 1.5% as charges of the car’s price which is being sold by its platform and also, 2% charges for two-wheelers. For other automobile services like warranty and insurance, it charges 12%. Different category-wise revenue share of Droom is as under:

Different revenue based share

Revenue Share

There are mainly four sources of revenue of the company i.e., Service fee, Subscription plans, Premium tools, and Advertising. Let’s have a look below how Droom is generating revenue from these resources.

  • Service Fee: This is considered as the main source for revenue generation that is chargeable on each successful transaction. As the marketplace of Droom is based on performance, so it charges in the range of 1.75-2.5% whenever a transaction becomes successful using their platform. This range may vary as per the vehicle type.
  •  Subscription Plan: Droom offers this plan for big auto dealers and in this, the company facilitates them with online services and tools. It gets approx. 15% revenue from dealers subscriptions.
  • Premium Tools: These include OBV (orange book value), credit discovery i.e. Droom credit, and economic history services. Using these customers can get a pricing report in detail and they can have a look at the amount that other people desire to pay for the same vehicle and the price on which the vehicle was sold. These platforms provide lots of information related to pricing so that seller needs not to take tension on the buyer’s confusion on costing. Droom credit service consists of 3 types of revenue streams i.e., processing fee, part of the loan value, and leads to lenders.
  •  Advertising: One more revenue source of Droom is advertising. The company advertises different vehicle brands like Toyota, Ceat, JK Tyres, etc. Through this source, the portal of Droom gets double traffic in comparison with other portals and also they receive millions of monthly searches.

Apart from the above-mentioned sources, Droom also earns revenue from commissions on used cars and used bikes. The Droom offers sellers to use its platform for vehicle selling in three different ways i.e., best offer, fixed cost, and auction. A locking fee of Rs. 2000 is paid by the buyer and after that only listed vehicle is displayed on the website.

9. Cost Structure and Competitor Review


The major expenses of Droom include salary and employee benefits, Advertisement and promotion expenses, advanced technology i.e., AI and machine learning. In FY19, the total expenses occurred on employee benefits were Rs. 75.4 crores and expenses on ad and promotion were Rs. 182.52 crores.

Competitor Review

The major competitors of Droom are Car24, CarDekho, Spinny, and Car Trade. OLX and Quickr are also on the list. The competitive advantages of Droom over its competitors are as under:

  • Droom follows all business models for its operation i.e., B2C, C2B, B2B, and C2C.
  • The above competitors of Droom are listing portals whereas Droom is a vertical platform for online marketplace for transactions of vehicles and other services. It is based on a transaction model in which it takes a commission on every transaction. It is easy to get sellers on Droom’s app or site as it provides free of cost listing.
  • Unlike its competitors, Droom provides an end-to-end service platform. Apart from posting listings on its site, it also facilitates 360-degree assistance to its customers.
  • It has an advantage over its competitors in using advanced AI and machine learning technology-based platforms.


Recapitulating, Droom follows a business model that has strong integration with new technology and evolving models. Along with sound delivery of services, it also pays attention to unique promotional and advertising activities. The market for automobiles is going to soar in the near future and Droom is certainly in for a big competition.


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