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Assessment of Automotive Retailing in China, 2018

  • Report

  • 75 Pages
  • July 2019
  • Region: China
  • Frost & Sullivan
  • ID: 4803963

Engagement of Individual Offline Touchpoints and Omni-channel Interdependence to Transform China’s Automotive Retail Market

The automotive retail market in China is likely to undergo a market transformation from experiential service to experience engagement; as well as from a complete sales solution to an intensive sales solution from 2018 to 2025. The automotive retail market is experiencing its maturity and a marketing approach of “everyone is a potential consumer”. In addition, the market consists of domestic, foreign, joint-venture automotive Original Equipment Manufacturers (OEMs). The rise of new domestic electric vehicle start-up OEMs is likely to lead to a new wave of online and offline retail touchpoints.

Automotive OEMs are likely to further expand their touchpoints by integrating ecosystem structures. The ecosystem covers automotive OEMs, parts suppliers, financing and insurance companies, aftersales service operators, eCommerce, software and telecom providers, and other parties. They have started to transform their marketing strategies through online and offline retail platforms, with key touchpoints such as mobile apps, official websites, official eCommerce networks, social media, and offline retail platforms. Nevertheless, the interdependent integration is blurring the boundaries between online and offline platforms.

In the “consider and research” phase, automotive OEMs provide higher personal experience engagement to boost customer interest and improve customer interaction. In particular, test drive activities have been transformed in the experience stores with a deeper and unique driving atmosphere, as well as fully automated trial experiences from automotive vending machines and car-sharing. The presence of physical offline touchpoints is important to shorten the purchase barrier.

In the “purchase” phase, Chinese consumers prefer to be close to online touchpoints. Especially the eCommerce platforms have transparent and standardized prices across different cities and regions in China. In addition, automotive OEMs are likely to build a vertical value chain to provide seamless and greater flexibility to the purchase process, such as financial solutions and official online flagship stores.

In the “experience” phase, automotive OEMs offer competitive aftersales services, including free service and maintenance packages, extended warranty, value-added service for 24/7 roadside assistance, and individual charging point installation. The exclusive experience brings intensive solution.

In the “retention” phase, automotive OEMs exist in all possible touchpoints close to consumers. Automotive OEMs support automotive brand-related activities including commercial sponsorship, corporate social responsibility, automotive club, customer relationship management, and exclusive non-related services (e.g., travel discounts). These touchpoints include individual participation, as well as the enhancement of automotive brand name, customer loyalty, and customer interaction.

Leading Chinese technology companies are the important participants in strengthening the automotive retail process and omni-channel. Especially the eCommerce and digital payment solution platforms help improve the seamless connectivity and inspire the entertainment element of the automotive retail market in China.

Research Scope

The goal of this study is to identify, research, and analyze the future of the automotive retail market in China. The study presents the innovations and disruptions that are revolutionizing the industry in terms of changing customer journeys and retail processes.

Research Highlights

  • To provide an overview of automotive retailing activities in China
  • To map the key features, activities, and technological innovations that automotive OEMs and dealers are implementing across the customer journey
  • To evaluate the market impact of new automotive retailing formats that influence Chinese customers
  • To identify industry stakeholders that are influencing the automotive retailing processes in China

Key Issues Addressed

  • How is the customer journey changing in China, and what are the key activities the automotive OEMs are performing along the journey?
  • What are the value-add services that automotive OEMs are offering to differentiate themselves?
  • How are industry participants outside the automotive OEM sphere impacting the automotive retail process? What are their service offerings?
  • How do automotive OEMs collaborate with other industry participants to optimize customer experience and maximize automotive brand awareness?
  • What are the new retail capabilities developed by automotive OEMs and other stakeholders?

Table of Contents

1.Executive Summary
  • Key Findings - Automotive Retail Market in China
  • Impact of Consider and Research Retail Activities Along the Customer Journey
  • Impact of Purchase Retail Activities Along the Customer Journey
  • Impact of Experience Retail Activities Along the Customer Journey
  • Impact of Retention Retail Activities Along the Customer Journey
  • Development Roadmap of the Automotive Retail Market in China
  • Top 10 Trends in the Automotive Retail Market in China

2.Research Scope, Objectives, and Methodology
  • Research Scope
  • Research Aim and Objectives
  • Key Questions This Study Will Answer
  • Research Methodology and Background
  • Research Background

3.Automotive OEM - Key Automotive Retail Activities Along the Customer Journey: “Consider and Research” Phase
  • Key OEM Retail Activities During the “Consider and Research” Phase
  • “Consider and Research” Phase - Flagship and Pop-up Stores
  • “Consider and Research” Phase - Lifestyle and Experience Stores
  • “Consider and Research” Phase - Car Sharing
  • “Consider and Research” Phase - Online Pre-purchase Experience
  • “Consider and Research” Phase - Automotive Vending Machine

4.Automotive OEM - Key Automotive Retail Activities along Customer Journey: “Purchase” Phase
  • Key OEM Activities During the “Purchase” Phase
  • “Purchase” Phase - OEM-related Financial Solutions
  • “Purchase” Phase - Leasing Service
  • “Purchase” Phase - eCommerce Flagship Store
  • “Purchase” Phase - Third-party Automotive eCommerce Platform
  • “Purchase” Phase - eCommerce Sales Solution

5.Automotive OEM - Key Automotive Retail Activities along Customer Journey: “Experience” Phase
  • Key OEM Activities During the “Experience” Phase
  • “Experience” Phase - Individual Charging Points
  • “Experience” Phase - Aftersales Service and Maintenance Package
  • “Experience” Phase - Connected and Smartphone App Services
  • “Experience” Phase - Extended Warranty
  • “Experience” Phase - Value-added Services for 24/7 Roadside Assistance

6.Automotive OEM - Key Automotive Retail Activities along Customer Journey: “Retention” Phase
  • Key OEM Activities During the “Retention” Phase
  • “Retention” Phase - Exclusive Non-related Services
  • “Retention” Phase - Certified Pre-owned Program and Used Car Sales
  • “Retention” Phase - Automotive Club, Forum, and CSR
  • “Retention” Phase - Commercial Sponsorship
  • “Retention” Phase - Customer Relationship Management (CRM)

7.Case Study - Industry Participants Apart from the OEM That are Impacting Automotive Retail and Customer Journey
  • Technology Company in the Automotive Retail Industry - Alibaba
  • Technology Company in the Automotive Retail Industry - Tencent
  • Key Notable Participants in the New and Used Car Retail - Selected Examples
  • Key Notable Participants in the Automotive Parts Retail - Selected Examples
  • Key Notable Participants in Automotive-related Retail - Selected Examples

8.Growth Opportunities and Companies to Action
  • Growth Opportunity - Automotive Retail Market in China
  • Strategic Imperatives for Success and Growth

9.Conclusion and Future Outlook
  • Key Conclusions and Future Outlook
  • The Last Word - 3 Big Predictions
  • Legal Disclaimer

  • Abbreviations and Acronyms Used
  • List of Exhibits

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Alibaba
  • Tencent