Automotive service e-commerce segment is turning hot in China now, with the market potential amounting to USD 50 billion.
Yangche51.com, an automotive service e-commerce company which was founded less than two years ago, has recently been the target of numerous multinational enterprises, with 16 major transnational venture capital and private equity firms having expressed interest in the company.
"We were told [by Yangche51.com] that we were the twelfth venture capital firm [interested in the company]; just on our way out of the conference room, we found [representatives from] four or five other companies in the waiting room," a partner of a major multinational venture capital firm, who wishes to remain anonymous, stated. "The automotive service e-commerce sector is going to be the next major target of investment in China; in this business ecosystem eventually one or two major enterprises whose assets exceed $30 billion to $50 billion will appear."
The above source also revealed that, since Alibaba Group's successful US public listing and the numerous global records it has set, multinational firms are looking for the next new investment opportunity in China. With the structure of the Chinese market for e-commerce enterprises trading in products already pretty much settled on, investors are turning their sights to e-commerce enterprises providing services. The scope of the automotive industry in China and the sheer number of services it covers are major reasons why it is the focus of attention. Any entrepreneurial company that manages to establish itself in the sector during its infancy will benefit substantially.
The source added, "It is hard to decide whether [Yangche51.com] is a perfect enterprise, but it is presently very hard to find a single solution to successfully open up the automotive service e-commerce sector. A great deal of cross-industrial experience and abilities are needed to ensure that an enterprise can genuinely succeed in the long-term."
