The importance of mobile
A big factor eating away at Carsales.com’s profit margins – but also delivering it page views and viewing times – is the dramatic explosion of demand for mobile applications for online services.
Carsales has responded, and its mobile app is the second most popular car-selling website in Australia (behind its own desktop website).
Mobile traffic was up 127% on the year before, and more than 1 million people have downloaded Carsales mobile applications on either iPhone or Android.
Roebuck says this is important. “Consumers love mobile; we’re seeing every day. We want to make sure we’re market leaders. I wouldn’t want to be here and saying ‘look how much our desktop has grown’.”
He says mobile is core to the group’s future because customers love it, even if the advertising model for it isn’t entirely workable yet.
“We can slow down our migration to mobile and hope it’s not the huge growth engine, like the newspapers did with the internet.
“Or we can go full-steam ahead with mobile and hope the advertisers will catch up quickly.”
Expansion
Carsales.com has expanded sideways, buying up and in some cases launching websites aimed at a variety of categories. Campers and caravans has been the biggest hit, with industrial vehicles and bikes also doing well. Today, non-automotive websites are responsible for just over 20% of the group’s revenue.
The group has grown its additional categories through several acquisitions. Roebuck says the company is still open to more.
“We’re a very good cash generative business,” Roebuck says. “If an opportunity arises from acquisition potential, there’s no doubt we’d be a good option to raise funding should we need it.”
The difficulty for Roebuck is that the majority of the Carsales profit model is reliant on professional dealers. It may not translate well to all the other types of goods.
Myriam Robin is a journalist with LeadingCompany. You can follow her on Twitter at @myriamrobin This article first appeared on Leading Company.
Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.
