Shifting Gears: Entering the Automotive Vertical

Sammanfattning: Tradera, Sweden's leading online marketplace for circular consumption, is considering entering the online automotive advertising market in Sweden as a new vertical to diversify its business. This thesis aims to determine if Tradera should enter the online automotive advertising market and to propose a strategic roadmap for entry if it is determined to be beneficial. The scope of this project was threefold: 1) to assess Tradera’s capabilities for undertaking the expansion, 2) to determine the most suitable approach to market entry, and 3) to investigate the effectiveness of a performance-based pricing model as a means to penetrate the market. Through a combination of literature review, an online survey, and interviews with industry experts, the research identified and evaluated the barriers to entry and potential enablers for Tradera's entry into the market. It was found that the market is highly competitive with medium to high barriers to entry. Among several specific barriers, the research highlights three main ones: 1) the two-sided network effects of current market leader Blocket, 2) predicting the timing of the market's development as it’s pushed towards transactional business models, and 3) proving tangible value with performance-based pricing without operational complexity. To overcome these barriers, the research identified several enablers which Tradera must fulfill, including: 1) leveraging its brand recognition, association with trust, and high platform traffic, 2) offering customers the option to buy used cars either online or offline, and 3) leveraging its in-house expertise and existing infrastructure to develop an operational lead-based model from the start. Lastly, a roadmap to launch has been defined in three phases: penetration, monetization, and reinvention. This roadmap highlights the requirements, actions, and concrete suggestions that should be executed.