Business / Auto China

Auto world on the road to e-commerce mode

By Zhang Junyi and Raymond Wang (China Daily) Updated: 2015-11-20 10:41

Auto world on the road to e-commerce mode

'Click and drive' shopping to come online in near future

Shoppers in China crazy about Singles Day, the largest online shopping day in the world that falls on Nov 11, helped China's automotive industry set new records for online orders.

According to data from two leading automotive websites, Autohome sold 54,085 cars, while BitAuto sold 77,882, which means the two sites generated more than 21 billion yuan ($3.29 billion) in a single day.

This success is reflective of Chinese consumers' passion for online shopping.

Auto world on the road to e-commerce mode

Zhang Junyi, partner of Roland Berger Strategy Consultants. [Photo provided to China Daily]

We believe that China's automotive e-commerce is ready for liftoff in the coming years-experts forecast annual growth rates between 30 to 40 percent for the next five years.

However, what does e-commerce in the Chinese automotive industry need to advance to the next stage and who will be the winners in that race?

Connect offline, online

When buying a car, most Chinese customers tend to get their information through research on the Internet.

According to interviews with 4S dealers, 80 to 90 percent of customers going to stores have already done research online nowadays.

Automotive information was essentially limited to several specialized online vertical platforms, with the biggest players, Autohome and Bitauto, attracting millions of visits a day.

Through their large user base, the sites offer advertisements to potential buyers and help dealers extend the reach of their physical showrooms by providing a centralized marketing platform.

Online sales, however, were handled separately from offline sales in the industry, because they were generally viewed by automotive manufacturers and dealers as playing only a supporting role.

During the past few years, however, with major e-commerce platforms realizing the importance of leveraging customer data from both virtual and physical stores, a complete automotive e-commerce ecosystem has gradually begun to take shape.

For the next phase, dealers are trying to integrate the two channels more closely into an online-to-offline, or O2O, model.

Alibaba's B2C online retail platform, Tmall, marked its first involvement in payment transactions.

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