SAIC announces entry on Suning as more and more manufacturers begin competing on online sales platforms

Gasgoo.com (Shanghai June 17) - Following the release of its OTO automobile sharing online platform, SAIC Group has announced its entry on the Suning trading website, Beijing Business Today reported today. SAIC is just one of several manufacturers offering their products for sale on online electronic platforms. Statistics show that there are over 25 automobile manufacturers operating on electronic commercial channels as more and more consumers shift from browsing traditional 4S dealerships to searching online for their automobile buying needs.

Mercedes-Benz, BMW and Audi were among the first brands to begin making sales via electronic commercial platforms. Not long after they were followed by both foreign manufacturers, such as Toyota, VW, Citroën, Chevrolet and Buick, and domestic own brand manufacturers, including BYD, Chery, Changan, BAIC and Geely. With the sheer number of manufacturers offering cars online, competition is becoming increasingly fierce.

Suning and yixun.com both offer automobile sales, while gome.com.cn has also mentioned its intent to expand into the automobile market.

"The emergence of electronic trading platforms offers a new entry point for automobile manufacturers," Gasgoo.com President Kevin Wale said. As market growth declines and infrastructure and user costs grow, manufacturers are working hard to find ways to control costs and increase sales profits, with finding non-traditional sales channels a key area of development. This development area will becoming increasingly important as manufacturers expand from first- and second-tier cities to third- and fourth-tier cities.

Nearly 100,000 automobile orders were made online in the first half of November. Guangqi Honda managed to gather over 1,000 orders for its New Fit via Tmall.com in the span of just 20 days last month.

According to statistics, third-party business to consumer websites such as Tmall.com and Jingdong account for the majority of online automobile orders, 80 percent, while vertical websites only account for 12 percent of sales.

Yayuncun Automobile Market Deputy General Manager Yan Jinghui believes that online platforms can help better improve brand awareness while at the same time reducing labor and logistics costs incurred during normal sales processes. The increasing combination offline product centers and online sales centers may become a future development trend for the Chinese automobile industry. Mr. Yan also points out to the appearance of online stores focused on after sales service as key in helping increase brand image.

Mr. Yan states: "With automobile [preferences] increasing, the everyday lives of consumers are also becoming increasingly tied to online shopping. In order to take advantage of this brand new method of consumption, manufacturers are changing their perspectives on sales, leading to increasing competition in online shopping and especially electronic commercial channels. [These channels] look set to become a new driving force in sales in the future."