Apr 08, 2019 (China Knowledge) - Chinese online used-car dealing platforms are increasingly investing into physical retail stores as they seek to improve customer experience on their platforms and improve brand recognition.
China which is the world’s largest auto market still lags behind most developed countries in terms of its used-car market with sales in the used-car segment just making a small portion of the country’s auto market’s total sales.
In 2017, twice as many new cars were sold as compared to used cars in China compared to the US were used cars make up more than twice the number of new cars sold.
As such, there is still much room for growth in the Chinese used car market. Last year, used car sales grew by 11.5% to 13.8 million units despite the Chinese auto market seeing a contraction of 2.8%. Of these used cars, 3.2 million of them were sold online, doubling from 2017.
To increase their presence and market share in this fast-growing market, used-car platforms are investing heavily into physical stores to improve customer experience and coming up with new business models to attract customers.
Guazi pays sellers half the price of the used car upfront before showcasing the car at its centers. The company then charges the buyers and sellers a percentage of the transaction value to make profits, attracting more sellers to its platform.
US-listed Uxin, the first used car platform to combine the online and offline business models has embarked on a franchise model, signing up more than 600 franchisees as of February this year.
Similarly, Alibaba-backed Souche has entered a partnership with PetroChina Kunlun Hospitality Co. to open outlets at the latter’s gas stations in Guangdong, Yunnan and Zhejiang.
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