What problems should be solved in the future used car market

The second-hand car trading platform "excellent letter Clap" (now renamed "excellent Letter") announced today to complete a new round of financing. According to the disclosure, "excellent letter" This round of financing for the total of 170 million U.S. dollars, led by the company for Baidu, 100 million U.S. dollars, and KKR, Coatue and other investment institutions with the vote.

By 8 o'clock in the morning, the company has confirmed the news and announced that it has completed a new round of financing from Baidu, KKR and Coatue, totaling $170 million trillion, with Huaxing Capital as an exclusive financial advisor.

Baidu is not the first Internet giant to look at the second-hand car market. In 2014, Ali on the cooperation with GAC, set up Taobao second-hand car trading platform; This January, Tencent joined Beijing-east together to become the owners of easy cars; bat, Lei's CIS capital also recently invested in the second-hand car Consumer-to-consumer trading platform "everyone cars."

In addition to these giants, 58 of the same city, net, the common People's network and other classified information sites also used to trade as a key business development, and to excellent letter, car easy to shoot, open new used cars, large search vehicles, Che Wangwei representative of the number of second-hand car trading service companies more numerous.

The question is: Can the second-hand car market accommodate so many players at the same time? What will happen to the whole market when the Giants enter the bureau? What problems and bottlenecks need to break through in the second-hand car market?

Foreground: Great potential for Internet + used Cars

Chinese consumers generally do not like to buy used cars, but this is now changing.

Data show that China's current sales of new cars and second-hand car sales of about 3:1, two U.S. 1:2~1:3, Japan about 1:1.4, the other mature market of about 1:0.7. From the digital point of view, this means that second-hand cars in China has a great development space, as people buy the concept of change, new car ownership increased, the demand for consumer cars to highlight the future second-hand car trading volume and new vehicle sales gap will continue to shrink.

China Auto Circulation Association's statistics can prove this--all year 2014, domestic second-hand car transactions amounted to 367.565 billion yuan, an increase of 26.03%. The total number of used car transactions is 6.0529 million, 16.33%, three times times the new market. The China Auto Market Index Research Institute predicts that by 2020, China's second-hand car market volume will reach 40 million, the market value would exceed 1 trillion yuan.

And this large market net rate is very low, online transactions accounted for less than 10% of the total. How to use it and the Internet to transform the industry to create new opportunities? This is the problem that the Internet giants, which are eyeing the traditional industry, think.

Take the production link as an example, the vehicle source of the second-hand car is fragmented seriously, almost all come from the vehicle owner scattered all over the country. But in the traditional trading chain, there is a lack of a platform to bring together the source of these debris vehicles. The convergence of traffic is precisely the advantage of the Internet.

In the United States, the world of second-hand car business has been popular. Well-known used car O2O platform has AutoTrader (the United States the largest second-hand vehicle trading platform), Cars.com (the United States, the second largest automotive classification site), Manheim (used cars auction platform), Beepi ("shared economy" type of second-hand vehicles trading platform), Aucnet (Second-hand car remote Auction service platform), CarMax (the largest second-hand car retailer in the United States).

The United States and Japan have main second-hand car auction business listed companies, several market value of about 5 billion U.S. dollars. Therefore, the U.S.-Japan market for reference, China's second-hand car market in the next few years the prospects are very considerable.

The present situation: many models, difficult to talk about subversion

However, the internet giant wants to dominate the industry is unlikely: the complexity of the second-hand car chain, so that its trading process is divided into several separate links, each link has several large enterprises exist, focus on solving a certain type of problem.

A second-hand car from the initial sale of the hand, the first to transfer to the hands of overcharging merchants (C2B), and then overcharging merchants will sell cars to retailers (business-to-business), the last car buyers from the retailer to buy cars (business). Therefore, the second-hand car trade was born c2b (production), business-to-business (circulation), consumer (consumption), and omit the intermediate links of the Consumer-to-consumer four models.

C2B on behalf of the Enterprise has opened a new second-hand car, safe and good vehicle, BUSINESS-TO-BUSINESS representative enterprises have easy to beat, excellent letter, business representative enterprises have easy car, Consumer-to-consumer representative Enterprise People car, market good car.

In addition to these four kinds of related to it technology and the Internet more than the model, the second-hand car market also has various types of vehicle and channel-led auction platform, consignment platform, purchase and sale platform, etc., 58 with the city, Bai as a trading information platform exists. In addition, there are a large number of third-party assessment services in the second-hand market.

The circulation link is many, the involvement Enterprise also many. In this long chain of value, the demand of two terminals for car sellers and car buyers is often seriously overlooked. For example, in the C2B link, b than c master more information, so will try to drive down the price of the vehicle, sell the car people can not get fair price, will give up the sale, objectively caused the whole market inefficient operation. And in the service, C on the vehicle understanding is not as good as B, because the lack of vehicle information traceability mechanism and perfect after-sale protection services, lack of trust leads to shrinking demand situation is also very common.

Therefore, although the Internet giant is menacing, but because of limited in a certain link (excellent letter business-to-business, everyone car consumer-to-consumer), the opponents are numerous, so difficult to talk about subversion, in the short term the impact on the industry will not be too deep.

Future: What issues need to be addressed?

In addition to the short term difficult to scale development, the formation of monopolistic advantages, Internet + Second-hand car There are many industry problems to face.

First, the second-hand car industry regulation lag, the policy is not perfect, causes the second-hand car market management level to be difficult to raise, the service function lacks. In China, second-hand car is not a commodity, not a property, only the concept of inventory does not have the concept of market-owned, the concept of ownership. In the second-hand car industry, because the law is not sound, resulting in very low efficiency.

Second, China still has not formed a complete unified used car value evaluation standard and the vehicle residual value release system, the evaluation of the second-hand cars is too simple and random, the actual value and the theoretical values vary greatly.

Third, the tax standards for second-hand car transactions are not uniform. According to the survey, all over the second-hand car transactions are basically based on local policies, tax rates vary widely. The cost of second-hand cars in some areas is too high, the profits of the enterprises operating used cars are meager, some areas use transactions but households to evade taxes, OTC, private transactions, illegal transactions, disrupting the order of second-hand car trading.

Four, the traditional second-hand car market credibility is low, poor after-sales service, leading to market potential can not be quickly released, the market efficiency is low. The specific performance is: the process of transferring second-hand cars is cumbersome, the price is not ideal and the car cash currency is slow, asymmetric information, consumers are "slaughtered" serious; the trading chain is too long. Unnecessary trading links increase the cost of the transaction, the second-hand car after-sales service problems, consumer security system is too weak.

In addition, the false condition of vehicle, the uneven source of vehicles and the shortage of circulation are also affecting the development of the second-hand car industry.

To sum up, the arrival of Internet giants, will certainly accelerate the development of second-hand car market rhythm, so that funds, flow and resources to a certain extent tend to focus. For small companies on the industrial chain, this means increased competition and an oligopoly. However, it is too early to talk about subversion, which is restricted by industry characteristics and development bottleneck.