Kavak brings highly efficient used car retail experience to the GCC via distinctive omnichannel
Latin American Auto-Tech company, Kavak entered the UAE market in 2022 and have unified technology and data to uniquely transform the UAE’s used car retail space. Following their entry, the brand has been on the path to growth, with an integrated ecommerce and physical retail experience, along with data-driven operations, making it one of the first of its kind car retail experiences in the region. As of October 2023, Kavak has shown robust growth with healthy unit economics, by doubling their volume in the GCC and reducing the burn per car by 4x. With a state-of-the-art reconditioning hub, a diverse local team, and integrated ecommerce capabilities, the brand seeks to disrupt the region’s used car market.
Kavak sets itself apart from other used car operators in the UAE by providing a one-stop-shop solution that oversees all aspects of the buying or selling process from sale to financing. Established under the leadership of General Manager Nicolás Ariza, their Hub, located in Dubai Festival Plaza, serves as a facility for reconditioning, taking customers through each step of the purchasing process, after sales services as well covering a range of financing options for diverse customer needs. The highly-efficient Hub holds a capacity to recondition more than 1,500 vehicles per month, an inventory of 600 cars, as well as a team of 100 people. This allows for increased transparency in the retail process, in an industry where scams and frauds are prevalent. In addition to this, the brand also offers buyers a 7-day test period, with no strings attached as well as one-year standard warranty.
“Since our inception in 2016, Kavak became the first unicorn startup in Mexico after just four years of operations, and now has a presence in 10 countries. In the last year we have been focusing on the basics for growing in the GCC market. Our customer experience seamlessly integrates data and technology for a clear and more transparent used car retail process that is beneficial for both buyers and sellers alike, and is the first of its kind in this market. 2024 will be a big year for us as we aim to expand across the GCC.” says Carlos García Ottati, CEO of Kavak.
“Our solutions cater to local needs, providing an innovative tech experience. Local customers can enjoy a premium online and offline experience through AI-powered service centers.” Adds Nicolás Ariza, General Manager of Kavak GCC.
Kavak was founded in 2016, in Mexico City, when Carlos noticed the need for increased transparency and minimized fraud in the used car retail market and sought to fill the gap by using data. The brand’s successful business model is backed by prominent investment funds such as Softbank, General Catalyst, and Greenoaks, among others, who invested more than US$1.6B in the brand, propelling it to unicorn status, and making it the most valued start up in Latin America with a valuation of US$8.7B. In less than three years, Kavak’s operations have expanded to include Argentina, Chile, Brazil, Turkey, and the GCC. The brand entered the GCC market in 2022 – operating in UAE, Saudi Arabia, and Oman, with an investment of US$ 130 million, and the acquisition of Omani used car retailer Carzaty.
Kavak is a brand that is extensively driven by technology, and their proprietary algorithm uses AI to provide market insight on accurate car prices for both purchase and sale, as well as gather insight into customer preferences. This also ensures that a fair price is set and minimizes the risks of fraud. The use of data has been central to the DNA of Kavak, and instrumental to its success.