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Auto aftermarket O2O sector reshuffles

Source: The Beijing News | Date: Oct. 28

  • On Oct. 24, Gongfuxiche.com announced the discontinuation of its door-to-door car cleaning service as part of its business restructuring, becoming another O2O company frustrated by car cleaning operations after Exc118.com, Xiche.ganji.com, and Ybzg.com.

  • Investors remain active in the auto aftermarket O2O sector as the Chinese auto aftermarket scale grew by 30% year-on-year to RMB 600 billion in 2014 and the figure is expected to exceed RMB 1 trillion by 2018. Since the beginning of 2015, more than 40 auto aftermarket O2O projects have been launched in China. In 2014 alone, more than 100 startup companies entered the auto aftermarket, nearly 10 times the figure for 2011. Their businesses cover every segment of the auto aftermarket, including car cleaning, repair and maintenance, and auto financial service and insurance.

  • At present, however, a number of operators have terminated their car cleaning O2O projects due to huge losses arising from serious homogenization, single and costly business model, high subsidy for users, and intensified price competition.

  • Insiders agree that the auto aftermarket O2O sector has entered into a period of reshuffling, and that data will play a key role in boosting the auto aftermarket service sector and integrated aftermarket solutions will be a valuable tool for operators to win the market.