Kaixin Auto Holdings (Kaixin) announced that their imported cars e-commerce platform arm Haitaoche Limited (Haitachoe) has entered today into a cooperation agreement with chinese leading e-retail platform Jingdong Century Trade Limited (Jingdong).
The objective of Haitaoche is gaining massive access to China’s fast-growing e-commerce auto sales market. The new sales channel will make possible for haitachoe tapping into diversified revenue source and growth opportunities by leveraging its rich resources and expertise in consumer vehicle sales and full range of value-added services.
Both parties Jingdong and Haitaoche aim to achieve total sales of Haitaoche consumer vehicles at RMB 2Bn (approximately $308 million) worth on the Jingdong platform. Both parties expect that the volume of sales will then increase by at least 50% annually during a three-year period. The total sales derived from the cooperation agreement are estimated at RMB 9.5Bn (approximately $1.4 Bn).
Around 4.5 Bn units of used cars to be bought online by the end of 2021
Following the data published by iResearch the penetration rate of used vehicles e-commerce in China is expected to reach the 21.6% this year, around a 0.9% higher than in 2020 and 2.6% more than the level reached in 2019.
iResearch estimated the trading volume of used vehicles e-commerce in the PRC at 3.8 Bn units in 2020 and forecast a 0,7 Bn of used cars units sold through e-commerce for 2021 to a total of 4.5 Bn.
Those numbers were provided by iResearch on April 30th 2019, but are not far from the actual situation even for 2020, while the PRC Government confined the population and restricted mobility within the country to fight against the COVID-19 contagion.
The fast growth of used car market in some way is responsible for the decrease in new car sales in China since 2018. The pandemic has hit hard the car dealerships sales. With consumers keen on domestic chinese brands, in the context of a sharp sales decrease of new units and with e-commerce figures jumping to the stars in the PRC, the agreement between Haitaoche and Jingdong seems the right move for this Kaixin’s imported car branch.
About the partners
Haitaoche is a China-based online retail platform for imported automobiles. Haitaoche is committed to developing into China’s leading innovative automotive retail trading platform. With a track record of good performance and reputation in the field of import car sales, Haitaoche is expanding its sales system into the field of electric vehicles.
Jingdong is one China’s largest online retailers and the biggest overall retailer in the country. Jingdong’s one-stop e-commerce platform serves over 471 million active customers with a vast selection of consumer products.
Founded in 2015 as a venture into China’s used car financing market by its corporate parent Renren Inc., Kaixin Auto is a leading premium used car dealership in China. Supported by the rapid growth of China’s used car market and leveraging its own hybrid business model that offers both strong online and offline presence, Kaixin has transformed from a tech-enabled financing platform into a nationwide dealer network that combines self-owned and affiliated dealers as well as value added and after-sale services.
Kaixin entered into a definitive share purchase agreement with the shareholders of Haitaoche on December 31st, 2020, pursuant to which Kaixin will acquire 100% of the share capital of Haitaoche from the shareholders of the online car retail platform.