The entrepreneur, founder of Buscapé and one of the investors of CWS comments on new technologies and its way of helping the automotive parts in the country.

At the end of the 90’s when the internet was growing tremendously, the electrical engineering Romero Rodrigues had no doubt that the digital era was coming to change people’s lives. His purpose along with three friends from the University of São Paulo (USP) was to create the price comparison website Buscapé. “We wanted to come up with something just as impactating as the internet itself”, remembers Rodrigues.

The business managed not only to survive the internet’s bubble in the 00’s but also became one of the most successful cases of technology in the country. The successful business dragged the attention of global investors and a part of 91% of the company was bought for 342 million dollars by the south african company called Naspers in 2009. In 2015 Romero completely disconnected himself from Buscapé, leaving the position of CEO for the financial director Sandoval Martins.

Business did not stop because he left the company, though. On the contrary. Right after leaving Buscapé, Rodrigues joined the brazilian fund Redpoint eventures, focused on startups. Among the companies that are part of that list are Gympass and ViajaNet. “Today we have more than 20 investments”, says Romero.

Startups are growing in Brazil. According to the Brazilian Association of Startups (ABStartups) the tech companies grew 30% in 2016, closing the year with over 4.2k active companies.

Before partnering up with Redpoint Eventures, Rodrigues had actions in 24 different companies. The autoparts sector was one of the tech visionary’s choices. “I analyze three things before investing in a startup. First of all, the people behind the business. Then, the market and last, but not least, the solution. In this case all things fit together. The market has a great potential and the solution offered by CWS through the Canal da Peça is very efficient”, affirms him.

Read the interview with Romero Rodrigues:

CWS: How does your experience in the digital market help identify trends that impact people and companies?

Romero Rodrigues: When I think about investments and trends I tend to analyze what are the conflicts today. When we look at the brazilian market we can’t always make a comparison straight with other global markets due to a higher amount of inefficiencies than the previously established markets. Therefore, this lack of efficiency in Brazil has to be fulfilled somehow and technology is here for that. The result are the startups that showed up to solve those issues.

CWS: is the autoparts sector also inefficient in Brazil?

Romero Rodrigues: Taking a look at the automotive parts business on a daily basis we are able to see a gigantic inefficiency. That starts from the moment a person or a mechanic’s workshop decides to but a part. They might have a hard time finding the right piece for their car. I’m not trying to be sexist or anything but most of the time the female public think they are being tricked because there is very little transparency in the field. There isn’t transparency in this market as a result of the little efficiency. Infact, one doesn’t know exactly which piece will work in their car nor how to stock that item. With this in mind, I think the Canal da Peça highlights itself in the market because it can solve the problem of those who are searching for a certain piece and those who don’t know exactly what they are looking for at the same time.

CWS: Do the workshops also suffer with the lack of information?

Romero Rodrigues: Yes. they often have trouble obtaining information. Generally analyzing the sector, there’s a big opportunity to bring more efficiency to this chain. The tendency is not actually to create new needs but to solve the huge conflicts in town at present. It’s necessary to settle these issues. There’s no need for new markets. The auto parts market is enormous, for example. (According to Sindipeças, it’s estimated that the autopart business capitalizes around 107,1 billion reais in 2019, representing 8.4% growth compared with the year before).

“Generally analyzing the sector, there’s a big opportunity to bring more efficiency to this chain.”

CWS: As an investor, how do you see the tech solutions which aim to the small business?

Romero Rodrigues: My experience at Buscapé was very focused on small business. Of course we had large business like shopping centers, but Buscapé owes its success to this good relation with the smaller ones. Buscapé survived because of its long tail with the small business. If there were only three or four stores, for example, it wouldn’t be necessary a comparison of prices tool. It also grew because we couldn’t stop thinking of how to turn the small business just as competitive as the big ones. The small ones need many tools and partners in order to get efficient and highlight itself. Tools like the Canal da Peça are excellent opportunities to small and medium stores because it’s what makes them competitive.

CWS: When it comes to the automotive parts sector, do you believe new technologies have the power to change the company’s relationship with its clients?

Romero Rodrigues: I think the autopart sector is very specific, consequently, needs its own solution. As a consumer, I don’t wake up feeling like buying a car piece. I need to buy the piece. Workshops often appear as decision makers. With this in mind, there’s a natural chain involving stores, manufacturers and distributors. The sector needs a specific solution but it doesn’t exist because the catalogs are very complicated, the parts are very complex. On one side, this situation creates many opportunities. On the other side, it creates the need to use a specific tool. All this chain requires a guided solution and I bet it is the Canal da Peça. A general platform, for example, will never provide what this sector needs.

CWS: Buscapé also built catalogs. Have you ever built one of automotive parts?

Romero Rodrigues: Catalogs change a lot from category to category. Few of them are as complex as the autopart one and for that reason we never built one. We tried but never managed to build the automotive parts catalog since it was the hardest one. We had to hire an outside company to finish the work. Everything needed to be very well done in order to work, including cars. It’s much more complicated to create the car catalog than the media and electronics one, for example. There are a lot of items like fabricators, model and other options making the work harder to do. We decided not to dive there.

CWS: In your opinion, how long will it take until the sector is 100% digital?

Romero Rodrigues: To deal with everything online, maybe never. And it doesn’t have to. The most important is the decision making to be digital so it could transform the chain. Nowadays , around ⅔ of products searching are done with a phone but many still look for it at shopping malls. The online transaction is going to happen at some point, though. Tools like the Canal da Peça can help with that. One of the biggest issues at this market is the catalog, which is already being solved by the platform. As a mechanic’s shop or client, I can use the Canal da Peça in many different ways. Afterall, the digitalization is happening faster than people might think. The practicality is impressive. Unlike in the past, the mechanic can fix a car and search for a certain piece on his phone at the same time. That catalog filled with grease is now replaced by a smartphone. I believe the market will be completely digital in about three years.

“The digitalization is happening faster than people might think. That catalog filled with grease is now replaced by a smartphone. I believe the market will be completely digital in about three years.”.

CWS: So those who are offline are losing business?

Romero Rodrigues: I think offline people are inefficient. It’s a complete waste of time. If you insist on being offline you’ll be deadly off the market because the digital is a fundamental channel. People often think about being online to attract more business and it does indeed. But what people might underestimate is the ability of the digital channel to bring more efficiency, the most important thing in the sector.

“I think offline people are inefficient. It’s a complete waste of time. If you insist on being offline you’ll be deadly off the market because the digital is a fundamental channel.”

CWS: Over the last decade you saw a variety of business growing in Brazil using online sales solutions. The automotive parts sector, specifically, is surrounding itself little by little in a virtual environment. What would you say to the more traditional decision makers in the field?

Romero Rodrigues: One of my business partners on Buscapé used to say that everybody who bet against technology, lost. I think you have to use the force in your favor. I would try to digitalize my business as soon as possible. It’s getting easier to put it on test. In 1999 you had to invest 1 million dollars to build an online store. Now an even better store costs around 50 dollars. This price drop to have access to technology makes it almost mandatory to digitalize it. In a few years companies won’t even have phones anymore, like a few homes already don’t, and that doesn’t mean they will stay disconnected. Infact, they’ll be more online every day.

“Everybody who bet against technology, lost. I think you have to use the force in your favor. I would try to digitalize my business as soon as possible.”

CWS: What is the best way for an auto part seller to digitalize his store?

Romero Rodrigues: a general platform certainly is not the best choice. A book seller for sure won’t be as good in selling auto parts. Besides, it could lose competition at the market. Can you imagine a seller using a general platform in a competition with one using a specific tool? The specific one doesn’t have to worry about a single thing, not even setting up a catalog. He’ll be close to everyone in the chain.

“It is very rare a platform that adds value to all at once. These ones tend to work out. The Canal da Peça doesn’t take value from one side to give to the other”.

CWS: The digital market of automotive parts in the USA and Europe is already a reality. Research points that online sales in a few european countries get to 11%. Do you think that Brazil has the same potential?

Romero Rodrigues: I think this is one of those cases that should be bigger in Brazil due to the sector’s inefficiencies. If we think about it, transportation network apps like uber are stronger in cities like São Paulo than any city in Europe. That happens because we don’t have an infrastructure. In Europe people use public transportation because there is a good one. Since we lack infrastructure, we must compensate with technology. At the auto business is the same thing. We have little information on parts, matches and everything that involves the market. Clearly we are headed to a path with less issues and more efficiency. I could be anywhere and still manage to search a car piece using my phone. I believe the physical stores will lose a little of its importance in the future. I’m not saying there won’t be stores anymore. I just believe it will transform itself more on a distribution center and storage for workshop’s supplies than a conventional store. That will happen naturally once people’s traffic slow down.

CWS: Do you believe the inefficiency of the auto parts sector that started to be fulfilled by digital platforms will attract new entrepreneurs?

Romero Rodrigues: I hope so. The more fish in the aquarium, the more oxygen and life there is. The Canal da Peça not only has the opportunity but also the responsibility of being that life bringer in the auto business and online environment. It’s a great responsibility.