(Chinese Version)

Editor’s Note:
Didi first started with the car rental market and then expanded gradually to other services related to the automobile industry. Didi’s ambition grows as its lines of business expands. Recently, Didi took one step further and started to sell cars as well, in hopes of finding a new car selling model besides the 4S store chain model. Additionally, Didi also aimed to prove that it had the ability to become a comprehensive platform while not losing focus at the same time.

Last night, a poster of a car-selling service from Didi Test Drive appeared in a Didi’s media WeChat group, revealing that Didi’s going to start selling cars at incredibly affordable prices on December 7th. From the poster we can see that Benz GLA model might be the first car model that would be available on Didi’s platform. When our journalist at TMTpost got contact with relevant staff at Didi Test Drive, they confirmed the well-circulated rumors. Today there are going to be sales promotion for the new service, which is much of a surprise to media outlets that predicted it would be selling second-hand cars.

Didi Test Drive specifically targets consumers who want to buy cars as convenient as possible. From now on, people no longer need to go to a 4S store and can directly buy cars on Didi’s platform after trying driving their ideal car models. All the car models on Didi’s platform are sent directly by the brand’s factories and buyers can also enjoy the aftersales maintenance services provided by the brand. However, maintenance services for the first batch of cars sold on Didi’s platform might still be provided by those brick-and-motor 4S stores.

Kuaidi’s team wants to use the Test Drive and car selling service as a stepping stone

Didi Test Drive is developed by Kuaidi’s team and came online in October this year. The new service was considered as the most prominent sector of business for Didi in terms of the business potential. Users who use Didi Chuxing’s cab-hailing app could browse cars on sales via the entry in the app and enjoy door-to-door services provided by the car owners. Users can personally try out the cars they are interested in within the route they have designed. Besides that, buyers who are interested in a certain car model can also understand the cars’ actual performance better through chatting with the car owners. At present, there are over 20 brands and 100 models on Didi Test Drive for users to choose from, covering many mainstream models in the market with the price ranging from 100,000 RMB to 1 million RMB. Didi is actively seeking cooperation with more car brands and more international and domestic brands will soon be available on its platform. Up till now, Benz is the first brand that enters Didi Test Drive’s platform.

Just not long ago, there have been rumors that Kuaidi was going to lay off some staff, which turned out to be false information in the end. However, Kuaidi’s team has never been the dominant force in the new company after the merger since it only controls Didi’s designated driver service “Daijia” and Didi Test Drive service, two of the new services for the company. Even though Didi has the upper hand in the competition with eDaijia, the sacrifices are big since the company relies on burning money to be the leading one. And therefore, whether the Test Drive business could survive or not determines the future of Kuaidi’s original team in the company since Didi Chuxing is growing more and more potent. What’s more, since the shopping season of the car industry is on and all the 4S stores are carrying out large-scale sales activities right now, most consumers tend to buy their cars during this period. It’s quite natural for Didi to launch such services at this very moment.

There’s no doubt that the market of second-hand cars will be hottest sector within the industry this year. Some industry insiders even predicted that the trade volume of second-hand cars would surpass that of new cars next year. So how is the market of new cars doing at present exactly? Gigantic as it is, the Chinese automobile market also has its limits. Therefore, some retailers will sell cars at a very low price, even lower than the price at which they got the cars. Such phenomenon has been quite obvious since last year, and this year is no exception. It’ still too early to transform from a market in which the production determines the demand to demand determines the production. So far the most important thing for automakers is to sell as many cars as possible and boost their sales performance.

Innovative sales models that transform the traditional 4S stores-based model

For auto makers, they don’t care if they are selling cars through 4S stores or Internet companies, since all they care is the sales performance. As long as they are selling cars to consumers, everything is fine for them. More and more Internet companies are eyeing on the automobile sector right now and are trying to remove 4S stores from the industry chain and sell cars to consumers through alternative channels. The following is a list all the alternative channels that have been established up till now:

1. E-commerce (such as AutoHome, Yiche.com, etc.)

AutoHome started as an Internet media for automobile lovers and potential car-buyers by providing the latest information and most professional guidance. Later on, it started to sell cars and created the concept Automobile E-Commerce during the 2013’s Double 11 shopping festival. Yiche.com adopted social networking marketing strategy this year and encouraged car-owners to recommend car models to their acquaintances. At the same time, the platform vows to provide a series of services, including test drive, loans and aftersales maintenance service, etc. In April this year, it started to sell CITROEN DS5 and 5LS merely on its e-commerce platform.

2. Financing (such as Jiadao.com)

Most Chinese consumers are still not comfortable with the buying-before-paying concept. Statistics suggest that while the average percentage of credit card consumption takes up 50% of the total debt around the world, that figure reaches merely 33% in China and 66% in the US. However, when we see this issue from another perspective, we might draw the conclusion that the market potential of credit card service can be quite huge. In terms of car-buying, car loans lower the requirements for buying cars, so that more potential car-buyers might be encouraged to buy their cars first and pay later. For example, users can either buy a car with no down payment, pay 66,000 RMB at first stage, pay 7,000 RMB per month for 24 months and then pay 174,900 RMB at last to get the car or return the car at that time on Jiadao.com

3. Using test drive service as an entry point (such as Didi Test Drive, etc.)

Test drive service not only makes it more accurate to find potential car-buyers but also makes automobile manufacturers’ marketing activities more effective. In addition, test drive creates a great new consuming scenario for automobile manufacturers besides the traditional 4S stores. After all, potential car-buyers seems to be more willing to talk with car-owners of their ideal car models and ask them for real and useful suggestions before their purchase.

So will you have a try of Didi’s new service?

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[The article is published and edited with authorization from the author @Ma Jing, please note source and hyperlink when reproduce.]

Translated by Li Jianeng (Senior Translator at ECHO), working for TMTpost.