Singles' Day spurs industry rally

Online-to-offline

Despite the rising number of platforms dealing with car sales, one thing they have in common is the online-to-offline mode.

In other words, except few models for group sales at Tmall, buyers usually submit their orders online and then sign the contract and make the payment at brick-and-mortar stores.

While some people wonder whether it can be made easier, both e-commerce providers and industry experts said the mode will not change in the near future.

"The mode is something new so it is too early to predict whether it will continue or change soon," Ma at autohome told China Daily, "although we hope that someday you just give a click, and the car you order will be delivered to your door."

Ye Sheng, executive director of Ipsos Auto in China, said, "This mode fits large, movable items, such as cars."

He said some complicated factors involved in buying a car, such as test-driving, negotiations over the insurance premium rate, maintenance and vehicle delivery, remain to be settled in 4S stores.

"Some of the steps are necessary for customers to make a reasonable decision," he said.

Charles Mills, vice-president of global retail experience at JD Power and Associates, noted that dealership experience is essential for car buyers.

"Few customers would be willing to buy a new vehicle online without touching it."

He explained that is because buying a car is among the highest-involvement purchases people will make, so they want to see, touch, and drive as well as their family's approval of the decision.

"All this requires a physical location," he said.

Nevertheless, he urged brick-and-mortar dealers to take the initiative to adapt to the new world of online shopping rather than just waiting passively for customers to come from third-party websites.

Citing data in a JD Power survey that some 80 percent of customers visit more than three auto websites before they make any purchase decisions, Mills said dealers have to understand that the Internet is now an important part of the shopping experience for cars.

But the study also showed that people tend to be less satisfied when they are researching on more than three websites because there is too much information.

Therefore, it is a good opportunity if dealers could take care of their customers by ensuring a great online experience in the first step, he said, adding that in the US and other Western markets, some of the best dealers are building their own websites as a part of their dealership now.

Some websites at the dealer or brand level have information on other brands' products and prices so that customers can compare and they can highlight their own advantages, he said.

Meanwhile, as the Internet empowers the customers with better understanding of prices, Mills suggested that dealers should shift their profit focus from new car sales to more transactions with the customers into a longer lifecycle, such as after-sales service, repeat business and vehicle trade-ins.

"It's important to get all of that future business. It's what we called lifetime customer value," he said.