Online Car Trader Plans to Sell Used Vehicles at 20,000 Gas Stations
A visitor to a PetroChina gas station in southern China might be able to grab a magazine, eat a quick snack or visit the restroom before hitting the road. If online car-trading platform Hangzhou Dasouche Auto Service Co. Ltd. has its way, the visitor may have walked to the station, but will have driven off in a newly purchased set of wheels.
This is because the company, better known as Souche.com, meaning “searching for cars” in Mandarin, announced on Thursday an agreement (link in Chinese) with state-owned PetroChina Kunlun Hospitality Co. Ltd. to open used-car outlets at more than 20,000 of the latter’ s stores.
PetroChina Kunlun runs the service functions at the gas stations of China’s top oil producer, PetroChina Co. Ltd. Souche outlets will be opened at stations in the southern provinces of Guangdong, Yunnan and Zhejiang before being tested elsewhere across the country, according to the announcement. Since China has about 110,000 gas stations nationwide, this amounts to potentially almost one-fifth of the total.
“In the future, users can not only refuel at the gas station, but also visit convenience stores, buy new cars and replace vehicles, among other on-site features,” the announcement said. It suggested that not all the gas stations will be full showrooms, but will support the company’s online search platform, perhaps by offering customer service or allowing customers to test-drive their potential purchases.
China’s used-car market has exploded in the last decade, with keys to more than 12.4 million vehicles trading hands last year, up 19.3% from 2016, according to the China Automobile Dealers Association. While that is still a way behind the 39.2 million used cars that auto-information platform Edmunds.com Inc. said were traded in the U.S. last year, the market is expected to continue expanding.
China’s tech-titans have picked winners in the race for market share. Tencent Holdings Ltd., which operates ubiquitous messenger app WeChat, has picked Chehaoduo as its champion, while Alibaba Group Holding Ltd. is rooting for Souche and Xianyu. Other prominent names in the sector include Goldman Sachs-backed RenRenChe, as well as Uxin Ltd. It is big business for investors. In September, Souche announced it has raised over $900 million in funding in just a year.
The move likely makes commercial sense for PetroChina too as it faces increased competition in the gas-station space. While its stations and those of other state-owned giants tend to be already ensconced in the best locations, foreign companies like Royal Dutch Shell PLC and BP PLC are looking to muscle in on the action, largely by targeting improvements in the services that stations offer.
Contact reporter Ke Dawei (firstname.lastname@example.org)
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