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Automotive Research Report.
Citation preview
The 3.0 era
The 2.0 era
The 1.0 era
Beyond MainstreaM
septeMBer 2014
AuTomoTive e-CommerCe3.0:A GreAT erA for oems
think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts
2
1
2
3
Think ACTautoMotive e-CoMMerCe 3.0: a Great era for oeMs
roland BerGer strateGy Consultants
The BiG 3
By 2016, the amount of Chinas automotive e-commerce will approach 225 billion CnY at an annual growth rate of 30-40%.p. 4
While there are still three major issues remained for Chinas automotive e-commerce dashing into the 2.0 era, the pioneering pathfinders, who have stepped into the 3.0 era, have made two prominent innovations.p. 12
roland Berger believes that building an ecosystem is critical for activating the base users of the aftermarket and oems will have the first-mover advantage.p. 4
The competition is increasingly
intense
p. 10
3roland BerGer strateGy Consultants
Think ACTautoMotive e-CoMMerCe 3.0: a Great era for oeMs
Automotive e-Commerce
the 2013 double eleven shopping festival has made "automotive
e-commerce", which is accompanied by a turnover of 24.3 billion Cny,
an eye-catcher overnight.
now "automotive e-commerce" has become the most popular
buzzword for this industry, where not only the vertical media, oeMs and
general online dealers have taken the leading position and even the
dealership groups are actively joining this rapidly spreading battle for a
slice of the cake. Whats more exaggerated is that it seems only a short
period of 3 - 4 years from the emerging of the automotive e-commerce
to its prevailing and the centuries-old traditional automotive industry to
be shaken while major online dealers cant seem to wait to get involved
in it before considering the business model and future strategy.
roland Berger means to put forward a clear business model and
development direction for this industry by analyzing this industry and
the major online dealers thereof and further exploring the development
direction and trend of the automotive e-commerce platforms and the
home advantage of oeMs.
4think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts
1. Chinas automotive e-commerce has begun to take shape
in the 2013 double eleven shopping festival, automotive e-commerce involving more than 1,730 dealers for more than 80 automobile brands, more than 200 car models and 91 car series, was undoubtedly the biggest winner at tmall, which became an unprecedented focus of attention due to the participation of the vertical websites, portals and general online dealers and has the orders for a turnover of 24.3 billion Cny as well setting a new record of automotive e-commerce.
it is estimated that Chinas o2o automotive e-commerce will have the sales booming at an annual growth rate of 30 - 40%, which are expected to approach 225 billion Cny in 2016 (source: orient securities, roland Berger). Meanwhile, the sales of automotive e-commerce has gradually increased in the first half of 2014, China's passenger car outputs are 9,708,500 and sales 9,633,800 (source: statistics by China association of automobile Manufacturers) of which approximately 20%, namely 1.93 million, are made on or via the e-commerce platforms. A
2. The major platforms are joining the battle for a slice of the cake
1) in this year some major online dealers have been launched on the vertical platforms, mainly aiming at the o2o aftermarket. on the evening of december 11, 2013, autohome, one of Chinas vertical automotive websites, was successfully launched on the new york stock exchange. in 2014, it enters the o2o market while maintaining its existing competitiveness (i.e. online diversion).2) Bitauto, another major vertical automotive website has as well made considerably great moves this year. first, Huimaiche was launched in april, and the C2B
Part A. market observation1
A
2013 douBle eleven: tHe proportion of tHe turnover
1 the sales amount of Chinas o2o automotive e-commerce [2012-2016e, billion Cny]source: orient securities; desk research; roland Bergers analysis
2 the proportion of the sales of e-commerce [January to June, 2014, %]
the turnover was 24.3 billion.
the turnover was 24.3 billion.
the turnover was 24.3 billion.
243Bitauto
auto.sohu
Car.tmal
autohome
48.1% 117billion
37.8% 92billion
3.3% 8billion
10.9% 26billion
~430~750
~1,230
~1,600
~2,250
2012 2013 2014e 2015e 2016e
20.0%e-commerce
sales
5think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts
to dip a toe in the water.the rise of e-commerce has made the demands for online car purchasing soar. about 45% of users accepting the survey have considered online car purchasing. the data of roland Bergers automotive industry center shows that in China, when buying a passenger car of any brand, a user gets the information via the internet mainly and occasionally new media and mobile apps, in which there is still great room for improvement. C
4. Policies are favorable for e-commerce development
recently the government's moves such as anti-monopoly, cancelling of the filing of the dealers and alike have caused quite a surge in the industry. although the parties have different interpretations of
premarket retroaction model is used, featuring low price and transparent transaction. next, Bitautomall was launched as a typical o2o platform. taoche was then launched in the C2B used-car transaction model.3) Cheyian was clearly aware of their strengths and weaknesses, and instead of directly competing with the online vertical dealers of premarket, it competed with other platforms in the B2C model via the broad aftermarket. B
3. The major platforms are joining the battle for a slice of the cake
We can see that changes in the market demand and consumer attitude contribute to the rapid development of Chinas automotive e-commerce and to that, the major platforms spend large investments
B
CHeyian
Huangpu
- Mass market specialty hospitals such as Mylike and asian Hearts and general hospitals like fosun 2000 service providers - 503 service providers have established online Cheyian stores
- 54 blocks of 12 major districts (except Chongming) of shanghai are covered at a ratio of one user every 2 - 3 km - High-grade car service has been provided for 10,000 car owners with membership
- the aftermarket B2C Model - B-side service providers are developed first, and then the C-side automobile owners are developed- online parts stores are developed at the same time
- 720 virtual parts supply chain members, including 23 auto Malls in the city and the main-stream parts suppliers in Jiangsu and Zhejiang, provide a richer resource for the automotive service providers to procure automotive parts
Business model regional usersPartnership dealers Parts procurement
Chongming
pudong
fengxian
yangpu
Hongkou
Changning
Changning
Qingpu
songjiang
Jinshan
ZhabeiJingan
Jiading
Baoshan
putuo
6think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts
the policy trends, there is no doubt that streamlining the organizations and decentralizing the authorities as well as enhancing the discursive power of the service providers will be the foregone conclusions. along with these trends, the fair competition, transparent information and open channels of the dealers will bring tremendous opportunities for the growth of the online automotive dealers, who can even compete directly with oeMs in the future.
it is sure that in just 3-4 years, the automotive e-commerce has been already launched, and in the future, with the rise of major platforms, the further improvement of policies as well as the maturing of consumers, will have its business models further evolved and clearer. now let's review the stages that the automotive e-commerce has experienced throughout these 3 - 4 years. D
vertical portals vertical portals
the channels via which the information of the automobiles of joint venture brands can be accessed [%]
the channels via which the information of the automobiles of independently-developed brands can be accessed [%]
41
26
13
30
24
19
the official websites of the brands
the official websites of the brands
new Media and apps
search engines
C
users Have CHanGed ideas aBout Car purCHasessource: the White paper of new observation on automotive products and innovative Marketing; roland Bergers project experience; roland Bergers analysis
D
open poliCies are favoraBle for tHe developMent of autoMotive e-CoMMerCe platforMs
Cancelling of the filing of the dealers Anti-monopoly
open parts channels
- different parties have different interpretations of this policy- roland Berger believes that general dealers operating in the one-support-n model may appear in the future - different parties have different interpretations of this policy- While the auxiliary platforms for oeM manufacturers online marketing will be turned into the direct sales platform, the online dealers may have their role radically changed and compete directly with the manufacturers
- the prices of the cars and aftermarket parts and the services thereof are more transparent and are deter-mined by the market and users rather than the oeMs. the transparent pricing and service is just one of the Ksf deciding the e-commerce platforms as a newly emerging power- Cross-region marketing may launch and the competition in the same region may be more intense. as a result, and the online dealers, as an efficient resource integrator, will have their advantages further highlighted
- if the parts source channels are completely unlimited, the dealers will have the same competitiveness as the independent aftermarket (iaM)- in the future, users loyalty to the oeM brands will be gradually turned to the service providers (dealers and the independent aftermarket) - e-commerce platforms will further exert their same-side and cross-side network effects and rapidly develop various users with equal relationships, to enhance users online probability and loyalty.
7think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts
Part B. Automotive e-commerce platforms on yesterday and today
A
revieW of tHe developMent History of autoMotive e-CoMMerCe platforMs
A
B
Autohome
TmallAutomall
Bitauto
The 2.0 eraThe closed O2O loop model
The 1.0 eraExtensive online
marketing
- developed in around 2005 - 2010- Consumers' purchase habits are changed - car purchases and exchanges of automobiles are more dependent on the internet - vertical websites take the lead to seize the opportunity to build partnerships with dealers and carry out online diversion- online marketing; car purchases are completed offline
- rapidly developed in the past three years- online dealers have realized the importance of the connection between the online and offline user data - the major platforms with a huge customer population start to take their own advantages to participate in transactions- seasonal promotions are the main driving force while the clue conversion rate still cannot be radically improved
extensive online marketing
The closed o2o loop model
as the description with the conventional terms of it industry going, automotive e-commerce has already passed the 1.0 era and now is marching in the 2.0 era. A
1. The 1.0 era: extensive online marketing
in the 1.0 era of extensive marketing, vertical e-commerce websites were the major players, and e-commerce platforms, as their representatives, had developed steady partnerships with dealers.in the 1.0 era, with more direct and simpler business models and relationships with other parties, the e-commerce platforms merely played a role of online marketing and were more likely regarded as "online marketing" by oeMs and dealers. the e-commerce platforms merely played such a supporting role, which was at most a percentage reflecting the monthly sales of the dealers, that they could never get involved in offline transactions even though some conversion effects had been obtained via online marketing. this is the direct reason why Bitauto launched Huimaiche and autohome turned to o2o, even though it has entered the stock market. B
However, although autohome could use this model to enter the stock market, the major platforms, apparently not content with staying in the 1.0 era and enjoying the first pot of gold - the primitive accumulation, are seeking transformations. not participating in offline transactions means failing to obtain the complete user data and this will directly lead to the platforms being helpless with the high-value information of the car owners. However, they are unwilling to hand over the information of the potential owners to oeMs, 4s shops and service providers, and therefore, the 1.0 era only lasted for 1 - 2 years before the 2.0 era in which o2o is the main business model came.
8think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
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2. The 2.0 era: The closed o2o loop emerges
as previously mentioned, the major platforms successively participate in offline marketing and try to make the online and offline marketing connected with each other, and thus is online-2-offline (o2o) named. since the online dealers have started offline transactions, the marketing conversion rate means more significance for them. then, the major platforms begin to create several types of business models, and thus the automotive e-commerce 2.0 officially starts.
in this battle, the major platforms try their best to take their own advantages and use seasonal promotions to increase the online marketing success rate. for example, tmall fully takes advantage of its base user data and taobao finance and other highly-featured products, to achieve precision marketing for different users and use financial products to attract buyers. Moreover, the use of the alipay pos machines at the dealer side can be regarded as a milestone marking tmalls involvement in offline transactions. users can buy cars from the dealers by swiping their bankcards, and an upgraded alipay pos
machine can even automatically divide the amount to oeMs and dealers respectively so that the conflict of interest can be reduced. C
in the 2.0 era, the online dealers begin to focus on online marketing and Make online marketing as routine as the ultimate goal, and thus a series of business models are created.
While the major platforms have the customer resources that they have accumulated in the 1.0 era fully utilized to get involved in offline marketing so as to make the online and offline marketing connected with each other, users comments as well serve as a forceful endorsement for brands and platforms. this endorsement continues to be used for completing the new round of online and offline marketing. in this way, the online and offline marketing are fully connected with each other to form a closed loop. in some sense, the domestic automotive e-commerce currently is still 2.0. e
However, if the promotions in the annual automobile festival and the double eleven shopping festival are not counted, the daily sales of automotive e-commerce are not so optimistic. as a durable consumer product (more likely a luxury product), an automobile still cannot be
B
analysis of tHe features of tHe 1.0 erasource: roland Bergers analysis
Business model main advantages main disadvantages
E-commerce platforms
Choose a car Have a trial drive Make a deal Use a car Sell a car
> Mainly use the vertical online dealers online marketing to diverge the offline marketing- the vertical online dealers profit from the dealers or oeMs online ads
> partnerships are established between dealers and vertical online dealers- vertical online dealers use professional evaluations to attract user traffic- dealers diverge the marketing to offline marketing via online ads
> oeMs and online dealers mainly provide one-way online ads
> the platforms cannot trace merely by online diversions any informa-tion of the customers diverged to the offline stores- all the negotiations, bargaining and transactions occur offline so that the vertical online dealers cannot participate in them
> Keep up with the trend that users are turning to buy cars online to ensure the user base
> expand the expertise to attract users more attention and improve the online-to-offline marketing conversion rate
User trafficDealers ads
relationship between the parties
9think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
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C
analysis of tHe features of tHe 2.0 erasource: roland Bergers analysis
D
tHe Business Models in tHe 2.0 erasource: roland Bergers analysis
Dealers advertising
Model 1: Offline marketing is dominant
Orientation of online dealers
Online dependence
Model 2: Online and offline marketing are provided simultaneously
The user data of the closed loopUser traffic / Financial service of the payment
system
resource flows
online
offline
13
6
5
24 7
Model 3: Online marketing is dominant
E-commerce platforms
Choose a car Have a trial drive Make a deal Use a car Sell a car
Business model main advantages main disadvantagesrelationship between the parties
> participate in the offline transactions, open the closed o2o loop and use multiple sub-models simutane-ously- the special online supply and special car supply model / the special modified-car supply model- the same models + offline bargaining + online subsidies model / the same-price-for-same model- the C2B premarket retroaction model
> oeMs thoroughly cooperate with the online dealers to develop products special for online marketing and other models> dealers share transactions with online dealers. for example, alipay pos machines are used in 4s stores.> oeMs and dealers may face troubles in pricing, accounting and alike
> the online and offline marketing are connected with each other to form the complete user data.> Multiple models can be used. this is favorable for the oeMs to deal with the unsalable car models or the car models special for online marketing> the major platforms use their advantageous financial service products to promote the conversion of marketing clues. for example, tmall provides financeprod
> the online and offline marketing are connected with each other to form the complete user data.> Multiple models can be used. this is favorable for the oeMs to deal with the unsalable car models or the car models special for online marketing> the major platforms use their advantageous financial service products to promote the conversion of marketing clues. for example, tmall provides financeprod
Model 1: Offline marketing is dominant
Model 2: Online and offline marketing are provided simultaneously
Model 3: Online marketing is dominant
Stocks are transferred Sales are increased
online stocks are cleared /discounted cars
same online and offline models are provided at same prices
C2B custom
supply for modified-car models
special online supply and special car supply
same models + online subsidies + offline bargainingonline show / diversion
10
think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts
priced and sold online as an fMCG. We can see that seasonal discounts, special subsidies
and other promotions are used in all business models and the non-financial leasing type financial products are as well essentially for discounts. in other words, the 2.0 era is
essentially still optimized online marketing, in which the issues, such as lower actual transaction conversion rate and that online marketing cannot proceed as routine, cannot be solved at all. Moreover, there is still a virgin space for tremendous reservations and the aftermarket.
e
Closed o2o loopsource: roland Bergers analysis
f
tHe reMaininG issues for tHe 1.0 and 2.0 eras
Integration of online
and offline marketing
Offline services
Online servicesMarketing of offline goods
Pushing
Endo
rseme
nt
Complementariness
Guiding
Diverged users
Diverged users
Diverged users
Diverged users
Marketing of online
> Essentially, the automotive e-commerce 1.0 and 2.0 more likely play the roles of online marketing and online-to-offline diversion
> The automotive e-commerce 1.0 and 2.0 have not made any substantial break through in enhancing the users experience throughout the whole service period, and there are still three major issues for
them to solve:1 The tremendous potential and resources of the aftermarket are still not integrated and used
2 A tremendous number of base users are not revitalized3 The online marketing cannot proceed as routine and the clue conversion rate cannot be elevated
Three major issues
for automotive
e-commerce platforms
?
f
11
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2 Part C. The 3.0 era is coming and oems will have the first-mover advantage
B
tHe total revenue of CHina's autoMotive industry CHain in 2013/2020[one billion Cny]
1) Including car wash and beauty, fast repair and maintenance, parts and overhaul 2) Automotive retail finance
2013 2020
Automobile marketing / manufacturing
Automotive finance2)
Automotive insurance
Rental of used carsAfter-sales service1)
9,420
40%
58%
4,296
23%14%16%
19%
19%
23%
6%
19%
The total revenue of the automotive industry
The CAGR in 2013 - 2020
along with the three remaining issues, a concept for the more open and inclusive 3.0 era has been incubated in the 2.0 era - the integration of the online and offline marketing. roland Berger believes that with the continued impact of the internet on the automotive industry, as well as the changes in consumer demand, the roles of the parties will be further transformed, and the business models will be clearer. the 3.0 era which aims at the aftermarket to mainly build an ecosystem will come. and in this round of innovations, oeMs will have the first-mover advantage.
1. Conditions are gradually maturing
1) automotive industry chains will continue to be impacted by the online dealers in the future, while the automobile consumption ecosystem has been changed
radically.affected by the e-commerce platforms, the original linear information exchange and transaction mechanism are turned into the complex multilateral market. for example, oeMs will directly confront consumers and directly guide the platforms to participate in transactions and the aftermarket. the dealers services, such as transaction, maintenance and repair, will be more prominent; and in the future, building the automotive ecosystem is the major development trend of e-commerce platforms, so a cross-industry alliance should be built to guide customers and enhance customers adherence to platforms.2) the maturing scale of the aftermarket and the changing consumer demand are as well demand guarantee and important driving force for the coming 3.0 era. in the comparison with the mature market, we
think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts
A
Source: Roland Bergers analysis
Orientation of the traditional roles Orientation of the future roles
Dealers are directly managed
E-commerce platforms are accessed directly
Consumers are contacted directly
Have a trial drive
After-sales services and derivative services
Diversion of marketing clues
Offline transactions
Integration of aftermarket resources
> The traditional dominant
position
> Not sensitive to the
consumer demand
> Whole-process services for
new car transactions
> A provider for after-sales
services and derivative
services
> Consumers are
contacted directly
> Consumers are
inculcated
> The development of the
e-commerce platforms
is guided
> Functions are
disabled before the
transaction
> Focus on transactions
while providing after-
sales and derivative
services
> Starts to participate in
offline transactions to
complete the closed
O2O loop> Integrates the
aftermarket resources
> Merely online marketing
> Profited from marketing
clues
Dealers are directly managed OEM
Choose a car model
Have a trial drive
Complete the transaction and take the car
After-sales services and derivative services
Diversion of marketing clues
12
Complete the transaction and take the car
Alteration of the orientation of the roles of the parties
Dealers
E-commerce platforms
Think ACTautoMotive e-CoMMerCe 3.0: a Great era for oeMs
roland BerGer strateGy Consultants
13
think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts
B
Contrast of tHe distriBution of tHe profits 1) of CHina's autoMotive industrysource: roland Bergers analysis
C
ConsuMers deMands for Car purCHase tHrouGHout tHe WHole serviCe periodsource: roland Bergers analysis
Distribution of the profits 1) of China's automotive industry
2013
100%
100%
Gross
profits
Gross
profits
Manufacturing of new automobiles
Manufacturing of new automobiles
Marketing of new automobiles
Marketing of new automobiles
Automotive finance
Automotive finance
Automotive insurance
Automotive insurance
After-sales service
After-sales service
Car rental
Car rental
Used cars
Marketing of used cars
41%
21%
6%12%
19%
22%
5% 15%
26%
4% 10%12%
1% 6%
Distribution of the profits of the automotive industry in developed countries
2013
1) Net profit
Car life ecosystem
Praise spreading APP recommendation
Community life Online subsidiesFinancial service Bargaining
E-commerce platforms
Praise spreading bargain supporting Exchange with other car club members
Cross-industry community
Car upgrades Recommended car
dealers Maintenance tips
Car rental
Recommended parts
Attention
Another purchase Transaction of used cars Maintenance Car use
Interested Visiting Purchase
Choose partsOnline promotions Have a trial drive
The new car marketing ecosystem
The aftermarket
ecosystem
DSource: Roland Bergers analysis
> Developed in around 2005 - 2010> Consumers purchase habits are changed choice and exchange of
automobiles are more dependent on the Internet.
> Vertical websites take the lead to seize the opportunity to build
partnerships with dealers and carry out online diversion
> Online marketing; car purchases are completed offline
The 1.0 era extensive online marketing
> Rapidly developed in the past three years
> Online dealers have realized the importance of the connection
between the online and offline user data
> The major platforms with a huge customer population start to
take their own advantages to participate in transactions
> Seasonal promotions are the main driving force, while the clue
conversion rate still cannot be radically improved
The 2.0 era The closed o2o loop model
> In the 1.0 and 2.0 eras, the conversion rate cannot be improved radically, and the potential of the aftermarket has not been excavated yet
> The OEM-oriented platforms begin to take their
own major advantages to integrate the resources of offline users and dealers
> Users are guided to be online via multiple
channels. The automotive ecosystem is built.
Customers adherence to platforms is enhanced
> Retroactively make the online marketing of new
cars as routine
The 3.0 era The aftermarket o2o ecosystem
The 1.0 eraExtensive online
marketing
The 2.0 eraThe closed O2O
loop model
The 3.0 eraThe aftermarket O2O ecosystem
Autohome
Tmall
AutomallChexiang
Bitauto
14
The 3.0 era is coming
Think ACTautoMotive e-CoMMerCe 3.0: a Great era for oeMs
roland BerGer strateGy Consultants
think actAutomotive e-CommerCe 3.0: A GreAt erA for oems
rolAnd BerGer strAteGy ConsultAnts 15
e
tHe features of tHe 3.0 erasource: roland Bergers analysis
Choose a car
User traffic / Financial service
EcosystemMarketing of new
automobiles
Dealers advertising Have a trial drive
Make a deal
Use a car and sell a car
Payment system
Mobile term
inals
The user data of the closed loop
Customers adherence to platforms
E-commerce
platforms
find that in the mature market, the profits of automobile manufacture and sales of new automobiles account less than 30%, and the profit of China's automotive industry is still mainly concentrated at the front end of the industrial chain and will be gradually bias to the aftermarket and derivatives business in the future. therefore, there are important opportunities for the development of automotive e-commerce, such as used cars, automotive finance, insurance and after-sales service, etc.Meanwhile, the consumer demand for cars has turned into the demand for service throughout the whole period, and this as well becomes the main driving force of e-commerce 3.0.
future car users increasingly want to get care and experience throughout the whole period. for example, the marketing of new cars can be more efficient and transparent, and the products can be learned from the transparent information and via the general social communities, so that the purchase can be carried out on a credible basis; or a car can be used in more social and convenient ways. after having bought cars, users hope to continue to get care, such as maintenance reminders and activities for car owners. they also hope to join the general automotive communities to communicate with other car club members in such as outdoor sports, public welfare activities, sports events and alike, including used car trading, car modification interest groups and other relevant car communities.
1. The 3.0 era has taken shape
When we are still discussing the prerequisites and Ksf for the 3.0 era, it has taken shape. the rapidly-transformed Chexiang and the newly-launched Cheyian, Chemayi and other independent aftermarket platforms, all use the general offline-to -online business models aiming at offline aftermarket users to build an automotive ecosystem and enhance customers adherence to platforms. D
Compared to the 1.0 and 2.0 eras, in some sense, the 3.0 era has two creations. first, the "use a car and sell a car"
C
16
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G
tHe total revenue of CHina's autoMotive industry CHain in 2013/2020[one billion Cny]
OEMs
1
Dealers / Service providers
Loyalty B2B service
Partnership
Partn
ership
Alliance
Benefit-sharing
Alliance
Dominant
Subsidies Partnership
Users
Advertising companies
Cross-industry alliance
3E-commerce
plat forms
1
56
2
34
and other aftermarket services are launched, and the platforms guide users to get online via a variety of channels and thus gain the users loyalty. second, an ecosystem is built as a means to realize Make the online marketing of new cars as routine from another innovative perspective. e
- Business models, overall, a variety of business models will appear in the 3.0 era. roland Berger believes that two of them will be more in line with the market demand the aftermarket offline-to-online Model and the aftermarket B2C/C2B Model, which have their own advantages and disadvantages, and are being actively explored in their respective fields.
- The relationship between the parties, in the 3.0 era, the multilateral relationship should be "win-win". oeMs and dealers in the 2.0 era have got rid of the conflict of interests on pricing, accounting and alike. oeMs have been dominant in platform operation and highly integrated their exclusive resources of dealers customers, and the platforms have been launched at a higher level. service providers benefit from the standardized cer t if ication ser vices and user information provided by the platforms. the platforms benefit from the growth of the B-side users, which promotes the C-side development. users benefit from subsidies and personalized communities. and the
platforms obtain valuable online user data and gain users adherence to platforms. Cross-industry alliance may become a source of the profits of the aftermarket o2o platforms. other industries can obtain the consumer demand information as an ecosystem player. a partnership (mainly for the user data and precision marketing) is as well formed between advertising companies and online dealers. G
- main advantages, With regard to the three major remaining issues for the 1.0 and 2.0 eras, in the 3.0 era, the first two major issues have been solved to some extent when the aftermarket is excavated and the base users are revitalized via mobile terminals, the in-car internet and the membership system. However, with regard to the major issue making online marketing as routine", currently, it seems that "finding another road to rome" should be applied to the 3.0 era the aftermarket ecosystem will be used to affect users' demand for personalized cross-industry communities and retroactively promote the daily sales of the premarket. Before the commodity attribute of automobiles has not been fundamentally changed, it is difficult to find a good approach to directly and significantly improve the daily online marketing conversion rate, so perhaps this approach is worth a try. h
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h
analysis of tHe Main advantaGes of tHe 3.0 era[one billion Cny]
> Mobile APPs and the membership system are used to enrich the channels for users to get online
> The OEM-dominated platforms can directly use the dealer resources, OBD and in-car Internet to revitalize the base users
> The membership system and cross-industry alliance are used to build an automobile ecosystem and enhance users praise and adherence to platforms
> Maintain the independence of the online marketing and use users' praise for the aftermarket and the ecosystem of the aftermarket to improve the conversion rate of new car marketing and make it as routine
Issues for the 1.0 and 2.0 eras Advantages of the 3.0 era Solutions for the 3.0 era
The tremendous potential and resources of the aftermarket are still not integrated and used
Excavate the great potential of the aftermarket to achieve a win-win
> The O2O model is started from offline, users car purchase as the starting point
> The interests of all parties are balanced by standardized and transparent subsidy policies so that a win-win is achieved
Multiple channels are covered to enhance the online user rate and revitalize the base users
Build an ecosystem to retroactively make the online marketing of new cars as routine
?
A tremendous number of base users are not revitalized
?
The online marketing cannot proceed as routine and the clue conversion rate cannot be elevated
?
- The key factors for success, age because 3.0 has great advantages and potential, and is now presented to us just as a prototype. in a closed loop, every node in the aftermarket ecosystem loop has become the key factor for success, which jointly affects the development of e-commerce platforms. i
2. soems will take the advantage as a first-mover
What is different from the history is that neither the vertical websites nor general online dealers, but the oeM-dominated platforms are the winners in the 3.0 era. Compared with other business models in the 3.0 era, the oeM-dominated e-commerce platforms have the following three advantages:
- The resources of basic offline users and dealers are rapidly revitalized so that the threshold can be quickly broken through and a win can be achieved at
the starting line., tan e-commerce platform will generally go through three stages of development the building of the platform, the booming of the number of users and the maturation of the platform. How to quickly go through the stage of the building of the platform and the stage of the booming of the number of users is the key factor for the development of the platform. Jan oeM-dominated platform will aim at and focus on offline marketing. since it has tremendous resources of dealers and tremendous data of groups / brands and users, if the data is properly used, the existing users of a large number of the groups / brands will be revitalized so that the time spent on excavating the users can be saved and the costs on the platform can be saved as well. k
- oeMs have diverse channels for their users to get online and have the advantages that other platforms do not have, such as the in-car system and the CrM system.
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Model features
The Aftermarket O2O Model
The Aftermarket B2C/C2B Model
The offline aftermarket /Online
usersOnline / Build an ecosystem
Users on one side are developed first /Platforms are developed / Users on another side are developed
The
subsidized
parties
. Users
. Dealers
. Taxi software and alike
. Currently: Not dependent on
platforms. Future: Not clear yet; may depending on the profits of the cross-industry alliance (Such as Ctrip) in the ecosystem
. Use the aftermarket with great potential as the start point
. Users on both sides are subsidized parties so that the threshold can be more easily broken through and the platform can grow faster
. Use the ecosystem, membership system and mobile APPs to enhance customers adherence to platforms
. A large investment is required for
building the ecosystem and executing the subsidy policies
. Future profit models are not clear
. Expand the channels for online customers to increase the online probability
. Via cross-industry cooperation, an automobile consumption ecosystem is formed, customers adherence to platforms is enhanced, and the marketing of new cars via praise is promoted
. Users
. Foreign OpenBay and alike
. Currently: Dealers service commission
. Future: Not clear yet
. Use the aftermarket with great potential as the start point
. Developed from service providers (the B-side) or users (the C-side) while standardized access, parts certification, transparent pricing, expert advice and other services are provided
. The user base and the service provider base are too low to enable any party breaks through the threshold
. There is a risk that a user may carry out a transaction via a contact or by directly visiting a store instead of via a platform
. Standardized service, transparent pricing system and parts certification
. Either of the B or C-side parties must first break through the threshold
Typical examples of
the platform
Source of
profit
Advantages
Disadvantages
Model
analysis
KSF
The KSF Model
Chexiang Cheyian Chemayi
Comparison of the business models of the 3.0 era
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tHe GroWtH route of a t ypiCal e-CoMMerCe platforM
i
analysis of tHe Main Ksf of tHe 3.0 era
Actual users of the platform
User entrance criteria
Building of a platform
Explosion of the number of users
Maturity of the platform
A
A
B
C
B
C
The ideal number of users = The actual number of users
At this point, the business model, profit model, subsidizing party, paying party and other multilateral relationships should be preliminarily definedAt the same time, which side of the users will be developed should be determined so that point B can be quickly reached
When the number of users reaches the threshold, the same-side and cross-side network effects should occur, and then the platform grows rapidlyB and C are the best periods for developing high-value users and enhancing users adherence to platforms
The platform enters a stable period of development. When multilateral interests hardly fluctuate, the business model should be adjusted properly to enable the explosion of another round of network effectsAt the same time, the coverage of the ecosystem can be considered when the profits are decentralized to avoid future risks
The closed O2O loop model Main KSF Future trends
How to make the user base of either side of the platform grow rapidly?
OEM-dominated automotive e-commerce platforms will rise rapidly to quickly win a large number of base usersActively inculcating the users becomes one of the KSF in the short term
Mobile APPs and the membership system will become the mainstream channels. OBD, in-car Internet and CRM will become OEMs channels with unique advantages
Parts certification, process standardization and experts online service will become the weight for expanding the expertise of a platform
The building of the ecosystem becomes the major point requiring an investment, such as cross-industry alliance, the standardization of the independent aftermarket, etc.Cross-industry cooperation will probably become a major profit point
How to guide the base users get online from offline?
How to expand the expertise and enhance customers online probability?
How to build an ecosystem and enhance users adherence to platforms?
How to build a future profit model?
1
2
3
4
5
User base
Users to get online
Connect the B side
Users adherence to platforms
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sourCe of tHe Materials for CoMparinG tHe foCuses of tHe online and offline MarKetinG of tHe platforMs: internal intervieWs of CHexianG[one billion Cny]
online
offline
Autohome / Bitauto
Tmall
Chexiang
Cheyian
Business model
Analysis of model features
Online diversion Online O2O
Via offline marketing, the user and dealer resources of SAIC Group to quickly activate both sides and break through the thresholdThe later ecosystem system is used to promote the marketing of new cars and improve the clue conversion rate
Aftermarket O2O
There is a tremendous potential in the aftermarketHowever, the B and C-side user bases are too small to reach the threshold
B2C/C2B Aftermarket B2C/C2BThe online clue
diversion is used so that offline base users cannot be controlled
Offline transactions are used so that the user data is obtained and the precision marketing can proceedTremendous resources of the aftermarket have not been integrated
Autohome / Bitauto Tmall Chexiang Cheyian
users can get online with more security, and therefore have the time spent online significantly increased. L
- third, the oeM-dominated e-commerce platform can use the membership system, build a cultural ecosystem for the general cross-industry communities and enhance the multilateral network effects, to eventually implement the closed loop model and enforce its competitive advantage. for example, the membership system can be fully utilized as a basis for building the automotive ecosystem, which integrates the informat ion of car purchase, car use, communication, and the customization, credits, membership development of car sharing members. in the future, the cross-industry alliances can be attracted to participate and the general communities can be built as well, involving such as outdoor
equipment, hotels, self-driving tours, etc. finally, the same-side and cross-side effects can be used to enhance users adherence to platforms, praise and loyalty as well as their cross-platform perching costs, so that the role of online marketing can be restored via personalized community" and thereby the online marketing of new cars can be promoted.
3. The future route to build an automotive e-commerce platform- roland Bergers advices
Just af ter a few years, Chinas automotive e-commerce platforms will enter the 3.0 era rapidly. facing the complex market demand, the frequently-varied relationship between the parties and the diverse
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CoMparison of tHe CHannels for users to Get online
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sourCe of tHe Materials for CoMparinG tHe foCuses of tHe online and offline MarKetinG of tHe platforMs: internal intervieWs of CHexianG[one billion Cny]
Typical examples of the platform
User development C-side users B-side users OEM-dominated Non OEM-dominated
Stage 1
Stage 2
Stage 3
Development of potential users
Development of potential users
Online potential users
Online potential users
More interfaces, such as the in-car system system and the CRM systemInstallation is completed by dealers compulsorily
The resources of dealer and car owner information are used so that this stage can be skipped
OEM-dominated e-commerce platforms fully use the offline user / dealer resources to quickly revitalize the B and C-side users, and thus the costs and time for platform growth are saved
Merely via PC terminals and mobile APPs
The resources of users on either side are searched with efforts, so that it is easy to fall into the "chicken and egg" dilemma
Standardized serviceAn ecosystem is built
Standardized serviceAn ecosystem is built
Conversion of loyal users
Conversion of loyal users
Diverse channels
for users to get
online are provided
Users online
probability (B-side
or C-side)
Mobile APPs PC terminals The CRM system of OEMs / dealers OBD The in-car Internet and the in-car system system
The guiding relationship between OEMs and dealers is fully used to encourage / force the dealers to get online and recommend them to usersThe online probability of the C-side users related to the in-car system system is nearly 100% (One can get online as long as he or she can drive a car)
Mobile APPs PC terminals
Users need to be inculcated to change their consumption habits and cultivate the trust in the platformsIn the independent aftermarket, a user may carry out a transaction via a contact or by directly visiting a store instead of via a platform, so there is possibly a risk of loss of the C-side usersThe loss and improper diversion of the C-side users will lead to the lower enthusiasm and online probability of the B-side users or even the risk of stagnation of the platform
OEM-dominated e-commerce platforms Non OEM-dominated e-commerce platforms
C-s ide users
B-side users
Chexiang The Openbay of Cheyian
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business models, how we quickly get Ksf, gain the competitive advantage and maintain the sustainable development, roland Berger gives the following advices in brief:
- short-term, increase the online time of users. for an oeMs platform or an independent platform, no matter if it is B2C or C2B, getting users online is a critical basis for the o2o aftermarket. the advantages of products can be used to improve the diversification of the channels for users to get online and increase the interfaces for users to get online.
- intermediate-term: Build an ecosystem. use a membership system to build the user communities involving car purchase, car use, maintenance, used cars, f inance and other business. attract the participation of the cross-industry alliances, involving
travel, hotels, outdoor activities, etc., to eventually build a cross-industry ecosystem.
- Long-term: make online marketing as routine. Completely connect the online and offline marketing, as well as the marketing of new car and the aftermarket service, to make the online marketing of new cars as routine.
after having been stably in a competitive position in the ecosystem, the same-side / cross-side network effect can be further used on an e-commerce platform to increase users cross-platform perching costs and improve their adherence to the platforms so that Win-ner-take-all can be achieved. the platform can eventu-ally extend its service to the relevant cross-industry platforms, share the profits and firm its competitive position. m
m
e-CoMMerCe platforM CoMpetition poliCy
Model adjustment Winner-Take-All Ecosystem coverage
Model adjustment
Profit party
E-commerce platforms
A
C
BProperly adjust the business model
Use the user data to analyze the multilateral demands, adjust the subsidized party and the profit party and update the profit model
Prevent the potential competition in advance. Initiatively extend or passively follow the value chain. Build diverse ecospheres. Decentralize the profits
Use the subsidy policy, precision marketing and soc i l i za t ion to enhance use rs adherecnce to platformsEnhance the discursive power of the platform and promote multilateral interdependence
Make different profit models and subsidy policies to improve users costs for their moving to other platforms
1
1 52
3
4
Enhance the same-side effect
2
Enhance the cross-side effect
3
Increase the cross-platform perching costs
4Platform ecosystem coverage
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Think ACTautoMotive e-CoMMerCe 3.0: a Great era for oeMs
roland BerGer strateGy Consultants
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