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What follows is the first of PakWired’s Success Profile series- documenting success stories emerging out of Pakistan’s entrepreneurial ecosystem.
Success Profile is an idea born out of the need for documenting the oft unacknowledged accomplishments of the fiercely promising entrepreneurial culture in Pakistan. It is a celebration of the achievements from Pakistan. 

Utilizing this platform, we raise a toast to PakWheels success!

Profile Summary

• Launched in 2003, PakWheels started as a car discussion forum, now has roughly 80 percent share of the automobiles classified ads market
• 100 percent increase in revenue during the last three years
• The portal attracted more than 25 million visitors in 2016 thus making it one of the most viewed website in Pakistan
• A one stop shop for all automobile related transactions
• Interestingly, PakWheels expects to be a billion dollar entity by 2020

How Did it All Begin?

The automobile sector in Pakistan has seen a remarkable growth during the last decade. There have been numerous factors behind this exponential growth including rising competition in the industry, influx of imported used cars, and rising disposable income that encouraged people to own a second car. Currently, there are so many options available, hence every segment of the market has a car of his/her choice.

Meanwhile, growing internet penetration and the smart phone bubble created a room for an online automobile trading portal. PakWheels capitalized on this opportunity and launched their services online. It enjoyed the perks of being a first mover as it became the first, and later, the largest forum of automobiles in Pakistan. Customers have developed a high level of trust on this website due to which they tune to PakWheels to discuss all automobiles related issues.

Also Read: All about Toyota Sure

The forum kicked off when many social networking websites had not taken a leap in Pakistan, and this forum served as a place for car lovers to interact and participate in discussions.

Suneel Sarfaraz Munj, Co-founder and Chairman of PakWheels, has been quoted while reflecting upon the origin of the platform:

“It wasn’t a commercial venture when we started PakWheels. It was just a place where like-minded people could get together”

However, backed by rising popularity, the company took a leap of faith and ventured into buying/selling transactions of cars on their website. Consequently, an official automobile classified portal was launched in 2005. Since then, there has been no stopping to this roller coaster ride!

The holding company of PakWheels, PAk eVentures received a funding of $3.5 million from Frontier Digital Ventures (FDV) in 2014. FDV is venture capital firm from Malaysia, aspiring to become the leader in online classified businesses in the frontier markets.

Before this funding, the company had been entirely dependent on the personal funding of its owners. According to the founders, this was a blessing in disguise for their survival as they were not dependent on outside sources of funding.

At attempts to get a confirmation about the news circulating the industry, that PakWheels has a valuation of PKR 100 crore after its first round of investment, Munj responded:

“It was the largest disclosed investment in any tech startup at that point and led to the opening of flood gate of investment for other local startups”

In addition, Suneel also stated:

“Our kitchens weren’t dependent on this venture. I believe that we succeeded because it was not our primary business; a person is more likely to make hasty decisions under pressure in that case”

In an interview with a local publication, he also shared his conversation with the owner of Carmudi stating:

“The head of Carmudi is a class fellow of mine and he called me, saying that we should partner up otherwise the deep pockets of Rocket Internet (a German Internet company) would devour PakWheels”.

Munj said that he replied with:

“Rocket Internet will not pay you if you don’t earn them something. We managed to do it for nine years and we’ll continue doing it; now one can see where Carmudi is vis-a-vis PakWheels”

Quick Read: An exciting story of a truck art inspiring a Pakistani startup

The two owners of PakWheels, Munj and Raza Saeed have been running different businesses other than PakWheels. Saeed owns a software house in Pakistan called Confiz Solutions. On the other hand, Suneel Munj runs multiple retail entrepreneurial ventures.

Munj explained his absence in the business till 2014 by stating:

“I was more of an absentee landlord at PakWheels before 2014, frankly speaking; Raza was managing everything here. Anybody who wanted my help used to come to me; I hardly ever visited the office”

Nonetheless, post FDV funding, he hasn’t missed a day of work.

PakWheels Reviews Are Industry Gospel

The forum has been famous for its reliable reviews, and consequently majority of the car customers keep the forum’s feedback into consideration before making any purchase decision. The impact of PakWheels reviews’ significance has been most evident after the launch of 10th Generation Honda Civic 2016. Customers complained regarding the interior of the car and welding marks on the front doors of the new Civic on the forum of PakWheels. The ripple effect of the reviews at PakWheels led to a general negative feedback for the newly launched car.

While earlier there had been accusations of partiality exhibited by PakWheels towards Honda, Honda’s acknowledgement of model defects and decision to rectify them accordingly, put into perspective the role of the platform: that of an industry watch dog and not a brand ambassador. This event established PakWheel’s authority as an influencer for any average customer. Later, Toyota requested PakWheels to review its new Fortuner 2017 which received alot of positive feedback from the blog.

Read More: WonderTree – A Pakistani startup that is specifically designed for special children

Reasons For Investor Confidence

PakWheels has consistently met the revenue targets set by its investors, as revenues have been increasing at a two-fold pace for the past three years. Therefore, investors have not only been satisfied, but they are all set to invest more money this year. Munj commented, opining in context to the revenue growth targets set by FDV:

“Whether you’re selling meat, or veggies, or cars, KPIs (Key Performance Indicators) for any business primarily boil down to revenue growth and, eventually, profitability”

He explained:

“All the tech ventures are valued at their ability or potential to earn revenue, not the revenue that they earn currently”

He further highlighted their hard work saying that achieving a 200 percent revenue growth is not an easy task.

Multiple Revenue Streams

• The Product Portfolio:

One of the significant reasons for PakWheel’s success is its reliance on multiple revenue streams as the company has been expanding its product portfolio. The owners believe that the only way to sustain huge growth is to introduce, foster, and develop new revenue streams. Based on this strategy, the company aims to be at $1 billion valuation by 2020.

PakWheels has expanded into different services such as CarSure, Price Calculator tool, reviews, classified ads, and aspires to become a one stop solution for all automotive needs.

Also Read: Consumer Reports declare Toyota Prius 2016 as the most fuel-efficient hybrid car

CarSure is Pakistan’s first used car inspection service that inspects a used car on a 200+ checklist by employing state of the art technology. It then provides an inspection report without any bias. It scrutinizes various aspects, including the current condition of the car, the body paint, engine, suspension, transmission, and interior.

Price calculator is another interesting service introduced by the company, which is based on a statistical model. As a result, it provides accurate information regarding the price of a car in similar condition. It gives a clear picture to the user by giving highest, lowest, and average price at which similar car has been traded in the market. The company has also started providing reliable parts and accessories.

• Advertisements:

Looking at the advertisement revenue, many ads on the website are ordinary ads which are posted for free. Its the featured ads which generate revenue for the company as they are posted for a longer period.

PakWheels generates majority of its revenue from classified advertising solutions offered to sellers and used car dealers. Dealers can use featured ads and post their vehicles and receive inquiries that results into quicker sale.

• Auto Shows:

In addition, the company pioneered the concept of auto shows in 2011. Since then it has conducted six auto shows which cater to a larger audience and not just car lovers. The last show was conducted in Karachi which gathered a crowd of 100,000.

What’s Inside The Crystal Ball?

The owners have a slightly different vision for the company as they do not aspire to take it to an international level. While shedding some light on the future plans, Munj said:

“There are still so many things that need to be addressed here in Pakistan, that we cannot think of expanding abroad. We must solve all automotive industry related problems for customers here in Pakistan”

He also added:

“Even today, very few people can buy a car on their own, despite the existence of PakWheels classifieds, inspection and price calculator”

Talking about the global practices, he expressed that classified portals are now executing a complete transaction instead of just classified advertisement. In exchange, they are earning a commission which is way higher then the regular advertising fee earned through the classified advertising method.

Online sale transaction is convenient for buyers and sellers while also gives them a sense of security, as a recognized portal is the mediator. PakWheels’ biggest asset is the trust level of its users and the company aims to build on that. The management proudly flaunts that it captures 80 percent chunk of the total online automobiles classified market in Pakistan.

Munj shared his vision:

“My aim is to make PakWheels a billion dollar company when valued, and the largest platform in Pakistan for anything and everything to do with automobiles”

If we analyze the business impacting environmental factors, we would come to the following conclusion:

Rapidly increasing number of cellphone users and deeper penetration of internet has also opened new doors of opportunities for online portals. [source: Pakistan Entrepreneurship Ecosystem Report]

Despite a trend of remarkable growth in the sector, one cannot underestimate the growing competition in the classified industry with players like OLX, Zameen, and Rozee backed by huge investments. And this competition is what gives us hope for the fittest player to emerge out as the industry leader.