After its 2019 ecommerce sales nearly doubled to nearly $600 million, the online car-buying service and ecommerce technology company says its first-quarter 2020 ecommerce sales surged by 160% to more than $230 million.

The U.S. automotive retailing industry has mostly skidded to a halt, but there are a few exceptions and one of them is ecommerce.

There are strong signs that even though high-volume foot traffic has dried up for dealer showrooms because of the COVID-19 pandemic, there are also strong indications that consumers are still continuing to research and buy vehicles online.

A case in point is Vroom Inc., a newly minted public company that already is a $1.1 billion automotive ecommerce platform. Vroom is out to capture market share and grow business in automotive ecommerce, a market that is generating total annual global sales of about $14.6 billion, according to the 2020 Automotive Ecommerce Report from Digital Commerce 360.

This week Vroom—a New York City-based used car retailer and ecommerce technology company that enables consumers to buy, sell and finance cars online—filed a registration statement to go public.

The company’s S1 filing with the U.S. Securities & Exchange Commission offers strong evidence that business remains at least stable for some automotive ecommerce companies.

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Vroom notes the following 2019 growth metrics:

  • Ecommerce sales grew year over year by 95.3% to $588.1 million;
  • Total sales increased by 23.6% to $1.19 billion;
  • Ecommerce represented 49.3% of all sales, up from 35.2% in 2018;
  • Ecommerce growth profit was $32.13 million, up 43.3%;
  • Gross profit fell year over year by 5.1% in 2019 to $57.86 million; and
  • The total number of used vehicles sold on Vroom.com increased by 47.2% to 18,945.

“We are driving enduring change in the industry on a national scale,” Vroom says in its S1 filing. “We take a vertically integrated, asset-light approach that is reinventing all phases of the vehicle buying and selling process, from discovery to delivery and everything in between.”

We are driving enduring change in the industry on a national scale.

The company’s public registration also offers evidence that consumers are still looking to research and buy used vehicles online—despite the impact COVID-19 is having on automotive sales in general.

For Vroom, ecommerce sales increased in the first quarter ended March 31. But COVID-19 did impact sales.

Zoom notes the following first-quarter growth metrics:

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  • Ecommerce sales grew year over year by 159.5% to $233.2 million;
  • Total sales increased by 59.9% to $375.8 million;
  • Ecommerce represented 62.1% of all sales;
  • Ecommerce growth profit grew by 147.9% to $14.3 million;
  • Gross profit grew by 5.3% to $18.4 million; and
  • The total number of used vehicles sold on Vroom.com increased 59.8% to 7,930.

Like many online sales in numerous merchandising categories, automotive ecommerce sales also were whipsawed in March and April, as the coronavirus forced big sections of the $21 trillion U.S. economy to shutter, causing nearly 40 million Americans to lose their jobs.

In the wake of COVID-19, Vroom put several measures in place to deal with the pandemic, including reducing its price per vehicle and other measures, the company says in its S1 filing. “Commencing in late March, we reduced vehicle prices in order to drive vehicle sales and quickly reduce the amount of inventory that was purchased pre-COVID-19,” Vroom says. “We also paused all vehicle acquisitions other than trade-ins, and we sold at wholesale auctions many units that had not yet been reconditioned.”

As a result, ecommerce sales rose but gross profit per vehicle declined, the company says. “During April 2020, we sold 2,880 ecommerce units and gross profit per unit was approximately $1,236, as compared to the 2,771 units we sold at $1,769 gross profit per unit in March 2020,” the company says in the S1 filing. “Due to the significant reduction in our inventory through April 30, we expect material decreases in future unit sales, revenue and gross profit until we are able to return inventory levels to pre-COVID-19 levels.”

Vroom expects to raise $100 million in its initial public offering. The company will use the proceeds for general corporate purposes, including advertising and marketing, technology development, working capital, operating expenses and capital expenditures. “We may also use a portion of the net proceeds to acquire or invest in businesses, products, services or technologies; however, we do not have any agreements or commitments for any material acquisitions or investments at this time,” the company says in the SI filing.

There are nearly 17,000 car dealers in U.S. that use the web primarily as a marketing tool to drive buyers of cars, trucks and sports utility vehicles to the showroom. But Vroom is among a growing number of well-funded automotive ecommerce companies, such as Carvana.com, eBay Automotive and others, which are taking market share and sales away from dealers by offering consumers a way to research and buy a used vehicle online. These companies are profiled extensively in the 2020 Automotive Ecommerce Report from Digital Commerce 360.

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The 2019 Automotive Ecommerce Report is available as a downloadable PDF for $299. It’s also included in our Gold and Platinum Memberships, which provide access to all Digital Commerce 360 research reports and certain online retailer databases.

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