Search giant Baidu enters China's US$59 billion second hand car market
Uxin, one of China's largest online second-hand car marketplaces, announced this week it has raised US$170 million from a number of investors, including China's homegrown search and online services firm Baidu and US private equity giant KKR.
Founded in 2011, the latest round of financing will help the platform expand its business-to-customer (B2C) model of second-hand car sales through its websites and smartphone apps, according to an announcement.
It said the new partnership with Baidu will allow users of the search engine to find live information on second-hand cars for sale on Xin.com.
Dai Kun, CEO of Uxin said Baidu and his company share similar visions for the second-car e-commerce market and will share resources in order to provide comprehensive and more transparent information to customers.
“We want to provide people in the market for used cars all the information they need, to connect them with the best, most reliable sellers, and to make the transaction as efficient and transparent as possible,” Baidu spokesman Kaiser Kuo said on Wednesday.
“Together, we can meaningfully improve the whole experience of buying a used car in China.”
Baidu has been expanding beyond its search and web service roots in recent months. In December, it invested an estimated US$600 million in Uber, the US based taxi-hailing app which entered the Chinese market last year. Uber announced this week that it was merging with Chinese rival Yidao Yongche to help its expansion in the country.
Uxin’s business-to-business e-commerce platform, Uxin pai, is the mainland’s largest used car auction site, with a 47.8 per cent market share in online transaction volume in the first half of last year, according to iResearch. The company, which also provides car financing products, operates in 50 mainland cities, employing about 1,000 specialists. It has also developed its own digital detector device called "Cha Ke" or Check Man to thoroughly evaluate the quality of second-hand vehicles.
Most importantly, the platform provided transparent information throughout the process of buying a second-hand car as well as a guarantee of quality, Dai said.
"Because of our service, our customer groups are expanding and more robust. Buyers used to need to learn about second-hand cars in order to buy them. Now more and more ordinary customers are buying [through us]," Dai said.
The Uxin deal marks the first investment made by Baidu in mainland China’s car industry, which is the world’s largest. More than six million second-hand cars were sold with a total trading volume of 367.5 billion yuan (US$59.01 billion) last year, according to the China Automobile Dealers Association.
By comparison, new car sales last year reached 23.5 million units.
In the United States, used car sales totalled 43 million last year – more than 2.5 times the number of new cars sold in that country.