Record number of cars sold online
November 17, 2020 Category China News Round-up, Weekly
China’s online shopping extravaganza, Single’s Day, that ran from November 1 to 11, set a new record this year, with sales on Alibaba’s Tmall totaling CNY498.2 billion. Popular items snapped up this year were not only lingerie, shoes and hair dryers. Up to 380,000 vehicles were ordered online, including those from Buick and Honda, up 158% from the same period last year, according to Tmall statistics. More than 50 auto brands joined the popular online event, offering more than 120 models to choose from. Customers had the chance to buy vehicles at up to a 50% discount, from around 7,000 dealerships in 300 cities across the country. As the Covid-19 pandemic has been basically put under control in China, the economy is rebounding and so is the overall vehicle market. Statistics from the China Association of Automobile Manufacturers (CAAM) show that carmakers sold 2.57 million vehicles in October, up 12.5% year-on-year. Sales have grown year-on-year for seven months in a row in 2020 and double-digit growth was recorded in six of them.
Another reason driving sales during the Single’s Day event was that it was probably the last major opportunity in the year to sell cars, after the conventional golden months of September and October. Almost all carmakers only sold a few cars in January and February when people were encouraged to stay away from showrooms to avoid the coronavirus pandemic. Many dealerships did not see sales recover until May or even June. Despite the fact that the expectations of many were exceeded, it is still very difficult for carmakers to meet their annual sales goals, with the rare exception of some premium brands. Statistics show that SAIC Motor, China’s largest car group, sold only 420,000 vehicles in the first 10 months, down 15% from the same period last year.
The pandemic has also sped up the shift from car purchases at brick-and-mortar stores to online marketing and sales. When offline events were controlled to ensure social distancing earlier this year, carmakers launched models online, and dealerships across the country learned to sell cars via live-streaming. In February, Volkswagen trained more than 70,000 employees in the use of live broadcasts and the production of short videos. The German carmaker said it sold 550 cars in March using a completely digital process. “Dealers present a new show on average every other day on platforms such as TikTok or Kuaishou. Car salespeople are becoming entertainers,” said Michael Mayer, then head of sales and marketing of Volkswagen brand, in a statement earlier this year. Some brands, including Cadillac and Porsche, hired online celebrities to help market their models, while others such as Nio and WM Motor had top executives explain the products themselves. Nowadays, TikTok and Kuaishou remain a sales channel for car dealers, although they are dwarfed by showroom visits. Mayer said digitalization will continue, but that does not mean online sales will become the standard, at least not for now, the China Daily reports.
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