Auto commerce that opened the non-face-to-face automobile consumption market

Auto commerce that opened the non-face-to-face automobile consumption market

Auto Commerce refers to a service that allows consumers to buy, sell or rent vehicles i,n a non face-to-face manner. Cars are expensive products that can cost tens of thousands of dollar. Therefore, it is common to check and trade the real thing directly in an offline store. The increase in demand for non face-to-face services and the acceleration of online conversions due the impact of COVID-19 have laid the foundation fort he growth of the auto commerce market.

Auto commerce is largely divided into ‘vehicle trading platform’, vehicle sharing and subscription service’ and ‘vehicle maintenance platform’. One area worth paying attention to is the ‘vehicle tradign platform’ that brokers used car trading. The used car market in the US and Europe is twice that of the new car market. Recently, nw car launbches have been delayed due to the global semiconductor supply shortage and the demand for used car purchases has further increased. 

The trends of the auto commerce market 

1. Providing all in one services that increase customer satisfaction

Like sour and tasteless lemons, a market that looks plausible but low quality are mainly distributed is called a ‘lemon market’. So, why must it be a lemon? This has to do with used cars. Volkswagen’s lemon colored Beetle, produced in 1965, had a lot of breakdowns. Owners who could not stand it, sold a large number of vehicles in the used car market and the term lemon market was coined.

Even today, the used car market is classified as a lemon market. The reason lies in its complex distribution structure. Used cars by comsumers go through dealers anda re delivered to purchasing firms. The buying firm opens an auciton and selss the vehicle to the dealer shop that receives the winning bid resells the vehicle to the consumer.

This causes rhe price to fluctuate according to the winning bid price, even fort he same product. Also becaues it is difficult for consumers to know the right price, information asymmetry between dealers and consumers occurs. To solve the structural problem of used car trading, the vehicle trading platform enhances consumer convenience by developing a customized all in one service.

1. Introduction of sales policies that maximize the shopping experience

 In the case of the US and the Europe, where the used car market is active, we are focusing on maximizing the customer’s shopping experience. Buying a used car is no different from buying clothes and shoes.

British unicorn company Cazoo guarantess delivery within 72 hours of placing an order. In this case, the vehicle is delivered free of charge and can be returned easily throuh the 7 day Money back guarantee system. With an unconventional sales policy, it became a unicorn company in the shortest time in the UK.

Carvana of United States, called the ‘Amazon of used car industry’ introduced a vending machine called ‘cabana bending machine’. Customers who purchase a vehicle online can choose either deliver or vending machine pickup. If you want to pick up a vending machine you can go to one of the 32 vending machines installed in the Us and take out the vehicle as if you were getting a drink. This sales method has been well received by consumers who demand novelty.

So Far, we have looked at the trends in the auto commerce market. Most unicorn companies are actively adopting digital technology to overcome the limitations of e-commerce. The trend is expected to accelerate further.