Auto parts promotion in B2B markets may see new opportunities for growth

According to the White Paper on China's Automotive Aftermarket Supply Chain published by Roland Berger, the total scale of China's auto parts promotion market is growing rapidly, with a compound growth rate of 20% from 2011-2016, and the scale has grown from RMB 190 billion in 2011 to a market volume of nearly RMB 500 billion, and the overall market size is expected to exceed RMB 800 billion by 2022.

Auto parts promotion, referred to as auto parts promotion, refers to the collection of categories that constitute each product in automobile manufacturing, repair and maintenance services. In the traditional automobile industry system, the distribution system of parts is divided into two categories: the OEM market and the AM market. In the auto parts industry chain, the upstream supply side is composed of domestic \ outside independent parts manufacturers; the midstream distribution side is composed of auto 4S shops, certified repair shops, layers (about three levels) agents; the downstream service side is composed of auto 4S shops, certified repair shops, auto parts cities and all kinds of repair shops, they work together to serve the end of the auto parts industry chain end car users.

Industry sources revealed that China's auto parts dealers reached about 500,000, downstream service providers reached about 1 million, and upstream producers reached about 200,000, which caused the industry's chain to be redundant, requiring layers of relationships for parts to reach repair shops, and the most important performance also includes high zero-to-complete ratio, dead stock, low flow efficiency, information asymmetry, market fragmentation and so on. Therefore, facing these pain points, coupled with the introduction of anti-monopoly policy in China's auto parts market, the third-party channels of auto parts market circulation have been opened up, which has given rise to the emergence of new models and broken the monopoly channels of the original auto parts market.

In terms of business model, it is mainly divided into B2B and B2C models: B2B business model is through the auto parts manufacturer to provide the corresponding parts to the auto parts B2B platform, directly sent to auto repair shops, in order to open up the upstream and downstream of auto parts, the platform as a supply chain management platform, business coverage including auto parts mall, warehouse management, transportation management and application data; B2C business is the car owner in the platform after the order The platform is a supply chain management system that needs to improve the auto parts mall, warehouse management, transportation management platform, and application data system in order to build a supply chain management system.

Divided from the player entry angle, there are three main modes: 1, directly cutting into the transaction link; 2, providing SaaS software system management services; 3, providing consignment services through the platform to do aggregated transactions.

At present, most of the players in the track use the B2B model, which is also the focus of industry attention.

In detail, the transaction-based B2B platform can allow purchasers to dock directly with suppliers and can make purchases on the basis of availability, which not only reduces the promotion cost of suppliers, but also reduces the circulation cost of operators and the maintenance cost of end users; secondly, this model shortens the time of goods circulation and enhances the circulation efficiency.

On this occasion, Capita has selected companies with typical business models in the industry for analysis.

Batoulou

Founded in 2013, Batulu is a B2B e-commerce platform for all-vehicle parts. Batulu's products are mainly repair and accident parts, and also cover wearing parts and maintenance parts. The trading platform provides garage users with a one-stop service for parts search, quote comparison, payment, delivery and after-sales.

In addition, Baturu, as an online distribution platform for all car parts actually involved in transactions, can conduct big data analysis and provide corresponding big data services based on the large amount of transaction information accumulated from daily transactions. For example, we provide insurance companies with auto parts data and integrated direct parts supply services. Baturu is gradually starting to provide data services for insurance companies based on parts data and transaction data, especially parts data such as accident parts and repair parts related to car insurance claims. It has accumulated more than 50,000 end customers, with nearly 2 million SKUs available for immediate sale.

Zhongchi Chevrolet

About UsZhongchi Chefu was founded in 2010 as a B2B service platform for the auto parts supply chain. It provides "one-stop" parts supply for downstream customers in China, and its business includes parts online shopping mall platform, data platform and supply chain cloud service platform. Its business model mainly has two ways, one model is the factory directly to the terminal repair shops, doing self-operated direct sales; one model is B2R, where the R is Retailer retailers.

At present, it has set up more than 20 branches in China and its business covers nearly 30 provinces. After seven years of accumulation and iteration, Zhongchi Chefu now has a supply chain cloud platform that integrates parts data, order transactions, warehousing and logistics, and capital settlement. Moreover, based on cloud computing and big data, we have differentiated parts into fast-consuming parts, commonly-used parts and long-tail parts, and established the inventory management mode of manufacturer's warehouse - Zhongxin warehouse - sub-store, in order to improve the efficiency of supply chain operation and optimize the efficiency of inventory turnover.

Kangzhong Auto Parts

Founded in 1995, WPMI has built and perfected its B2B auto parts supply chain system and built a wide range of offline direct service shops to take over the upstream suppliers and serve the terminal garages in the S2B (Supply chain platform-to-Business) new retail model. In terms of business model, the company has adopted a direct store model, while at the same time sinking its channels to reach out to more garages in the lower market to meet the needs of garages in third, fourth and fifth tier cities.

At present, WPMI's business covers more than 150 prefecture-level cities in 27 provinces in China, with 17 regional warehouses and more than 310 shops, of which more than 20 are already operating normally as agents.

In the future, it will be committed to building a domestic auto aftermarket parts service network and launching the "Thousand Cities and Thousands of Stores" project, which is an integrated solution launched by the company in conjunction with the "new retail concept", relying on the mature supply chain platform resources, from first-tier cities, satellite cities to county cities. It plans to cover more than 1,000 service outlets in China within two years, relying on the resources of its mature supply chain platform, from first-tier cities, satellite cities to county cities. The company is currently in the process of setting up its main warehouse in China to prepare for its future 30 regional warehouses.

Cartoon Cloud

CheTongYun is a parts e-commerce trading platform to improve the efficiency of the industry and form a domestic network of auto parts supply chain management services, "CheTongYun" is an intelligent auto parts supply chain service platform based on the big data and algorithm application of 400 million auto parts SKUs.

Its system can realize the presentation of granular parts structure through VIN correspondence search logic; provide intelligent query experience based on parts data shelf and form traffic entrance; realize accurate parts search, release parts ordering demand and provide auto parts supply chain transaction service. In late 2016, CheTongYun officially launched the auto parts search system "Matching Road" and started to enter into parts trading, and CheTongYun has docked 500 parts manufacturers and primary agents upstream and more than 2,300 maintenance organizations downstream.

At present, Chetong Cloud has built 30 parts turnover offices and logistics distribution systems and hosted 6 large auto parts factories in China, with an expected turnover of over 2 billion in 2018.

From the perspective of existing players, although the domestic auto parts market has been developed for many years, compared with the United States, which already has five auto parts dealers occupying more than 30% of the U.S. market, in China, the auto parts supply chain system still lacks a company with a large volume. In addition, as the domestic auto parts gross margin is lower than that of its US counterpart, it will take longer for the head company to come out.

However, at this stage, there are also new opportunities for growth in the auto parts market.

In terms of policy, the promulgation of the new auto sales management regulations stipulates that suppliers are not allowed to restrict who parts manufacturers can sell to, and that dealers and after-sales service providers are not allowed to restrict the resale of parts.