Chinas car ownership soared, Alibaba Tencent is interested in car maintenance business

 Chinas car ownership soared, Alibaba Tencent is interested in car maintenance business

Up to now, automobile 4S dealers and most small private repair shops have been dominating Chinas automobile maintenance service industry. International chains such as ExxonMobils mobil1 and Michelin, which also have a significant presence in the Chinese market, are now embracing big technology companies. Earlier this year, ExxonMobil and Tencent set up a joint venture to allow consumers to buy mobile 1s offline maintenance services online.

Automobile 4S shops affiliated to or associated with automobile manufacturers usually provide a three-year warranty for the cars they sell. Since then, most maintenance work has been handled by private car repair shops.

These private repair shops are small in scale and inefficient, and can not match the large-scale maintenance network supported by new technology in terms of scale and coverage. Technology companies think they can put all this together, says Huang Qiwei, head of Shanghai based consulting at Ipsos, a market consultancy

Photo: auto repairman is working in the offline repair shop of tmall

In Shibalidian Auto Parts City on the outskirts of Beijing, auto mechanics say large technology companies have begun to squeeze small private repair shops.

Business is not good, says Wang Tingsong, who opened a repair shop in Auto Parts City 14 years ago. With young consumers using mobile phones for everything, he said, the invasion of big technology companies seemed irresistible. It started with restaurants, then barbershops, then pet beauty shops, and now its the car industry, he said.

Chen Baoan, owner of a nearby repair shop, says the only way to do this is to work with the digital industry. Just as many taxi drivers have signed up with didi travel, Chen Baoan said he recently joined the tuhu maintenance network, and since then his customer base has expanded by a quarter.

The main investor of tuhus car is Tencent. It sells parts online, and arranges maintenance services in offline brand stores and franchise stores like Chen Baoan. A spokesman for the company said that as the first company in China to switch to smartphone based car repair services, tuhu has more than 52 million users since it was founded nine years ago.

For a long time, Alibabas tmall and Tencent backed Jingdong have been selling auto parts online, and now they are following the example of tuhu. Consumers can buy parts of their cars on WeChats mobile phone via Tencents Alipay and Alibabas, and make repairs when they make repairs at local repair shops.

Qingyan said they would not increase the total number of car repair shops in China. Its more like an upgrade to some of the existing phones, he said.

Although it is not the first time that Alibaba has set foot in a real enterprise, it may soon become the largest entity business under Alibaba. In the next few years, alibaba will open thousands of automobile repair shops.

Headquartered in Ireland, Kangzhong auto parts is an auto parts supplier and a joint venture partner of Alibabas newly established maintenance network tmall. The plan will cover the whole country, said Jim Blair, the companys senior vice president

Tmall offline auto repair shops have recently begun to flourish in the west of Shanghai, where many car dealers and repair shops gather. Wang Bing, operator of a tmall car maintenance shop that opened in August, said people were surprised to see the familiar tmall logo on the door of the shop.

They kept coming in from the street and asking what we were doing, Wang Bing said. His own red ford F-150 pickup truck, with the same tmall logo, was parked outside the store. They want to know if this is true, Wang added

Photo: Wang Bing opened a repair shop in Shanghai belonging to tmalls car network

In the field where the car repair process begins with smartphones, it should be worth it, Mr. Wang said. Its getting harder and harder to make money in this industry, he said. I hope tmall can make it relatively easy. (Chen Chen)

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