Automotive industry takes virtual commerce to new levels in China | Expert opinion

9/22/2014 9:56:08 AM

Expert Laure de Carayon explains

In China the automotive industry experiments with virtual commerce like nowhere else in the world. Car brands use every trick in the online book to sell cars – and even invent some more. Club China looks at this trend with Laure de Carayon, founder of China Connect and expert in the arena of marketing, digital and mobile in China.

Laure de Carayon’s blog on the China Connect website made clear that car sellers understand China’s e-consumers. They love a good deal, are keen users of local mobile social apps like Weibo and WeChat, and like the latest mobile payment services because it makes life so easy. De Carayon mentions some successful experiments. In 2010, Mercedes-Benz sold 205 Smart in +3,5 hours on Taobao. In May 2011, Lamborghini choose to exhibit several models on Tmall to offer Chinese netizens the ultimate thrill to shop for a new car, resulting in several bookings (the transactions were handled in the showroom instead of online). In 2012 Mercedes-Benz was even more successful with a sales blitz on Jingdong (JD): 300 Smart were sold in 89 minutes, and over 17,000 people added the model to their watch list. Again in January 2013, this time on Weibo, Mercedes-Benz sold 666 units within 9 hours.

Although China remains a cash-based economy, mobile payment is definitely revolutionizing the way the Chinese shop. Digital wallets adoption is growing in the same pace as the smartphone penetration and mobile payment technologies.
Laure de Carayon: “Digital finance is impacting Chinese consumption behaviours while offering an ever more diverse range of opportunities to enrich the way brands can connect, engage, and sell with/to people.”

Another new trend that is taking off in China, says De Carayon, is crowdfunding. “Alibaba recently launched its ‘YuLeBao’ crowdsourcing service offering Chinese people to invest in popular films and competitor JD (which Tencent owns 15% of) followed the example with the new crowdfunding platform Feniziqian.” The automotive industry was quick to put the crowdfunding principle into its sales practice, with sinofrench car maker DS, who launched its own ‘DS OrdersBao’ to target the Chinese young modern business elite.

Arnaud Ribault, General Manager DS China, wanted to drive DS 5LS online sales in a new and breakthrough way. “Our strategy has been to leverage WeChat social commerce platform as the key driver for conversation and sales. The idea was to create the first automotive crowdfunded campaign”. For this, the DS Store WeChat account opened its virtual doors and a campaign was launched, engaging the audience during a 6 months period, leveraging three new e-commerce products. In the first phase, consumers could pay 1 Yuan and benefit a DS 5LS luxurious feast: a 100 000 KM free maintenance for 3 years. In the second phase, car buyers were invited to pay 5 000 RMB in deposit, and get 11,11 RMB per day until their car is delivered (which can take up to a max of 45 days). The third phase was the launch of the “1 Yuan Premium DS Crowdfunding”. Laure de Carayon: “This created a mobile internet circle sales mode. Fundraisers were to send a link to friends (supporters) and invite them to collect car purchasing funding. DS’ offer was that it would pay 100 Yuan (with a maximum of 10,000 RMB) for each friend who paid 1 Yuan to the car buyer.”

The first car crowd funding campaign was a huge success as 2,500 DS 5LS were sold across China in 3 months. DS recorded 15,850 fundraisers and 250,000 supporters. It worked so well that the brand extended the operation the whole summer, in July and August. In addition, more than 20 “One Hundred People Party” were held for fundraisers, supporters and prospects, with car demonstrations, cocktails and games, held at DS’ car dealerships across China.

What can China’s automotive industry learn from DS? De Carayon: “In my view, the campaign was successful because DS leveraged the crowd funding concept on a successful ‘hype’ platform such as WeChat. This is certainly the favourite tool of DS’ core target group, the ‘Chinese young modern business elite’. They are the ones who (contribute to) set trends, and create the buzz. DS innovated in growing a user base of fans and potential and future customers. WeChat is a great tool for CRM in China!”

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