Burned out 50 billion in 4 years, a large number of second-hand car dealers closed down at a loss, and no one sold at a discount

2022-04-28 0 By

Earlier, the sale of second-hand car websites in China was all the rage. Not only many enterprises entered this field, but even leading enterprises like Tencent invested in this field.But today, second-hand car dealers, not only burned through $50 billion in four years, but no one buys them even when they sell them at reduced prices.So what are the reasons for this?”Guazi second-hand car monopoly network, no middlemen to earn price difference” this is sun Honglei’s advertising slogan for guazi, so far it is still very familiar to people.At the beginning of the development of second-hand business in Our country, is actually second-hand housing.After this, the domestic second-hand car business began to rise gradually.In addition, with the development of The Times, many enterprises have joined in and created second-hand car platforms, such as First Che, Bitche and so on.It is worth noting that after a number of enterprises joined in, the industry did not flourish. Instead, it burned up 50 billion yuan in only 4 years, making domestic second-hand car dealers lose money and go bankrupt in large numbers.What’s going on here?As you all know, e-commerce has been developing since around 2010.As a result, second-hand car sales have gradually developed online.But around 2013, due to the hot development of this platform, there was a peak of second-hand car dealers obtaining financing.At that time, Tencent and JD.com entered the game, including an agreement with BITche, which received $1.55 billion in investment.Not only that, in the following year, the domestic finalists of 17 second-hand car dealers, also obtained financing, the amount of $900 million.As the number of enterprises in this line increases, second-hand car dealers have also played an advertising war.And each advertisement is a large sum of money, only sun Honglei’s advertisement cost $100,000.This is mainly because the financing they have obtained is relatively high. Data shows that between 2016 and 2019, domestic second-hand car platforms have received 50 billion yuan of financing.It’s just worth noting that while they’re spending more, they’re not earning more.According to the data of the platform at that time, the commission fee was only 2%-3% or between 2,000-3,000 yuan.That’s a tiny profit for a huge platform.That’s mainly because they don’t make money from fees, they make money mainly from car loans.For Uxin alone, finance accounted for 80.4 percent of the platform’s total revenue in 2017, reaching $944 million.It is worth noting that under such circumstances, the second-hand platform has ushered in the collapse.This is also related to the fact that they make money from loans.To be specific, Murray Car finance was seized for this reason.In addition, a large number of second-hand car business closed down the real reason, or because of the chaos in this field, like quality, after-sales problems and so on.You should know that someone wanted to sell his car to a second-hand enterprise before. When the first enterprise asked the price, the enterprise said it could only sell 100,000 yuan, but the customer felt the price was too low and left.When he went to the second used car company, he offered only 60,000 yuan.In desperation, the customer went back to the first store to sell.And this situation is not a coincidence, in fact, these second-hand car dealers agreed that they would share the profits after the event.Moreover, there are some consumers in the second-hand platform to buy a car, home only to find that they bought back the car there are all kinds of problems, such as brakes, difficult to start the car and so on.At this time, when consumers go back to the car dealer, they can only get one answer, which is originally a used car.It is precisely because there is so much of this kind of behavior in the industry that it is losing money and even going out of business.It is worth noting that after that, the second-hand car industry also gradually declined, and now it has reached the point that no one wants to reduce the price.To be specific, Renren Car, which Huang Bo once endorsed, will be sold to 58.com for 8,586 yuan in 2020, according to multiple media reports.However, 58.com said that this is not true.In this sense, other companies will not buy the industry even if they sell it at a lower price.