Hey Dealer taps into Korea’s used car market by connecting car owners with dealers, who place bids for the right to sell the car. The app, launched in October of 2014, has accumulated over a thousand transactions in the last two months.
Using the app, users can upload pictures and information about their cars. After the necessary information is uploaded, a closed auction takes place. More than two hundred used car dealers all around the nation can place bids on the car via the closed auction. After the car owner selects the highest bid, an automobile specialist accompanies the selected dealer on a visit to the car owner to finish the deal. The bidding system is able to offer low charges for car dealers by reducing middle transaction fees. For car owners, Hey Dealer offers higher prices and a more convenient way to sell their cars.
As more Koreans are buying used cars, Hey Dealer is well positioned to target a growing market. Korea’s second hand automobile market has seen a rapid increase in the last four years. The Ministry of Land, Infrastructure, and Transport reported that more than 3.3 million used cars have been sold in 2013, up from 1.96 in 2009. This is more than twice the number of new car sales in the same year. Experts predict that used car sales will continue to increase over the next few years as information available over the Internet makes buying and selling pre-owned cars more accessible.
Used car auctions are expected to increase, as well. Last year, the South Korean government rolled out reductions in regulations on used car auctions. Currently, car auctions only make up a mere 2% of all used car sales, but the numbers are expected to rise in the future.
However, Hey Dealer faces stiff competition from small and large companies that also supply used cars. With new legislation that cut regulations regarding used car lots, several companies have likewise reached out to increase their supply of used cars. SK and Hyundai, which both own used car auction lots, have also seen steady growth in their sales in the last year.
Nevertheless, JinWoo Park, CEO of PRND which services the app, believes that Hey Dealer can carve out its own niche. “Hey Dealer can offer used car owners the highest prices available through a bidding system of dealers and low commissions. Even used car dealerships owned by large corporations are participating in our system as bidders. We are not competing against one another but are working together as partners to grow the used car market,” said Park.
Hey Dealer is currently only available for Android.
-Inspired by Platum