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.

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

In contrast, the U.S. auto repair industry did not appear the same scale of technological disruption. This is the world of several large maintenance chain stores. Compared with the local small maintenance shops in China, the market position of these maintenance enterprises is difficult to shake. American e-commerce Amazon sells auto parts online and cooperates with auto repair chains to install them, but the company has not announced plans to open its own exclusive repair shop.

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

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.

Analysts say the Chinese market has 600000 auto repair shops, large and small, twice the number needed. Qingyan, head of Jingdong automobile, said that Jingdong hopes to incorporate the best existing maintenance stores into its network, with the goal of increasing the number of physical stores in the maintenance network from about 1000 at present to about 4000 within three years.

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.

Tmall offline auto repair shops have recently begun to flourish in the west of Shanghai, where many car dealers and repair shops gather. When the operators of tmall were familiar with the maintenance shop of tmall in August, they were very surprised when they saw the maintenance 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

After investing $440000 in the repair shop, Wang Bing hopes to attract more consumers with the help of tmalls brand recognition. In order to be able to operate in the name of tmall and attract users to stores, Wang Bing will pay Alibaba about $22000 for three-year franchise rights, and will start to hand in more than 15% of the profits six months after its opening.

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