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A hurdle for Carsales and Trading Post Merger
by
Hayley Woodgate
The Australian Competition and Consumer Commission (ACCC) has warned that car sllers would be squeezed for choice if the proposed deal between Carsales and Trandpost goes ahead. The chairman Rod Sims said that the proposed acquisition would remove the Telstra owned TradingPost as one of Carsales Limiteds “closest and most effective competitors .
“The Trading Post provides an alternative that is popular with dealers and private advertisers,” Mr Sims said in a statement on Friday.
“Market participants have submitted to the ACCC that new entrants have been, and are likely to continue to be, unsuccessful in any attempt to match the inventory and audience size of Carsales or its smaller competitors Trading Post, Carsguide and Drive,” the ACCC said.
The size of the Carsales audience is impressive to say the least; In data released by the ACCC courtesy of Nielsen Market Intelligence, 84% of Page Impressions in Australia within the Automotive Classifieds market are on the Carsales website.
On the surface it appears that TradingPost is not very popular with “only” 6% of Page Impressions within the marketplace, however when put into perspective as being CarSales biggest competitor in combination with a potential future merger between the sites, its possible that CarSales would further dominate with over 90% of Page Views.
There are two other notable competitors (second and third largest competitors to Carsales) which are Carsguide and Drive of whom are receiving 4% and 5% of the marketplace s page views respectively. These websites are a conglomerate of News Ltd, Fairfax Media, and large car-dealership networks in Australia. The ACCC makes specific mention to the size and resources of these businesses and their inability to penetrate the market.
“The two other largest competitors are Carsguide and Drive. The ACCC s market inquiries suggest these parties have struggled to win market share from Carsales despite having ownership links to print classifieds in newspapers, which might be expected to provide some competitive advantage through delivering audience and providing scope for bundled offers.”
Further concerns were raised with the following blunt comment:
“The ACCC is concerned that network effects may exacerbate the competitive harm arising from the proposed acquisition, by adding significant inventory and audience to Carsales.”
It is clear that the ACCC feels that the proposed merger would be detrimental to the marketplace, however it is yet to be see if they will forcibly put a stop to it.
The ACCC is currently seeking further feedback and has revised its decision date back to 29th November 2012.
Hayley Woodgate has university qualifications in Media, Marketing and Public Relations with more than ten years experience in the Australian industry.Currently working with the used
carsales
and general
tradingpost
classifieds markets.
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A hurdle for Carsales and Trading Post Merger