BEIJING, Jan. 17, 2019 /PRNewswire/ -- Uxin Ltd. (Nasdaq: UXIN), China's leading car trading platform, announced on Jan. 14 that its key cross-regional transaction service volume exceeded 10,000 units this past December. The 2018 figures were more than 75 times higher than those from the same period in 2017.
More than that, the policy has made an impact on customers' way of life, its users said. 31-year-old Yuanyi in Xi'an has a wife who has been paralyzed for many years. He has supported the family with humble wages earned from an insurance company and has long dreamt he might someday travel with his wife.
In order to make his dream attainable, Yuanyi planned to buy a car. In fact, he bought a used car from a local retailer, but the car was overpriced and constantly malfunctioned, leading him to sell the car and attempt to find another one.
In September, Yuanyi searched online and encountered an advertisement for Uxin used cars. He took a look at the company's website with the hope of finding a good car. Luckily, he came across a 5-seat domestically-made MPV Beiqihuansu H2 that he really liked, but it was owned by someone who lived in another city. After consulting a sales agent, he was told that Uxin could deliver the car to him, with the entire package totalling just USD 5,188 (RMB 36,000).
"I never thought that I would buy a car online," he said. However, he eventually made up his mind because Uxin ensured that the car could be exchanged if he encountered any problems within three days. Uxin also offered a 30-day guaranteed return policy in the event of a major traffic accident. He likewise found the one-year quality guarantee appealing.
The prices of used cars of comparable quality are affected by factors such as geographical preference and circulation restrictions. Massive price differences often exists between different cities. Traditionally, customers are able to buy cars in the places they work and live in, but they often have limited opportunities to purchase cars from other cities. Although some buyers have the resources to do so, they typically have to pay significantly higher prices.
Luo Lei, deputy secretary-general of China Automobile Dealers Association, said that vehicles always flow from high-density areas to low-density areas. However, the demand for cars in second-tier and third-tier cities is high, but supply of cars there is relatively low, which is the opposite of first-tier cities. Therefore, a used car may be sold at a higher price in second-tier cities compared to first-tier cities.
In 2018, China's Ministry of Commerce began promoting the cancellation of the used car restrictions policy. In the past, some cities restricted the inflow of used cars that don't meet environmental standards and thus prevented a massive influx of these vehicles into the local market. However, enforcement of the new policy may cause the used car market to flourish.
What Uxin tries to achieve is to establish a nationwide used car trading network supported by its cross-reginal transaction service. And there are advantages.
The network helps to increase the inflow of cars into second-tier and third-tier cities, which gives customers in these cities a wider range of selection and increased chance of buying their favorite cars at reasonable prices. For example, if a customer in a small city such as Beihai, which is located in southern China's Guangxi Province, searches for a used red Mercedes-Benz C-Class on Uxin's platform, he may find hundreds of Mercedes-Benz C-Class cars. "You may not know where the cars come from, but our service makes sure that you can receive them in 5 days," said Dai Kun, the CEO of Uxin. However, on other used car trading platforms, customers may have much fewer choices of cars. Clearly, the nationwide trading network makes the difference.
The network also helps lower costs for used car sellers. In fact, third and fourth-tier Chinese cities have much potential to grow. What local residents of such cities need are better services, which Uxin cross-regional transaction service and its network aim to provide. Wen Chao, the Hasen used car seller in Xi'an, used to fly to many cities in China to select and purchase used cars to then take back to Xi'an. These business trips often costed at least RMB 5000 (USD 719) per trip. Uxin's cross-regional transaction service provides used cars from more than 200 cities and can even cover the cost of transferring the vehicles. Wen said that the service can save the company at least half of the total transaction cost.
Finally, the process of used car purchasing has been transformed and has become standardized. Customers can access cross-regional transaction services, get after-sale services, and take advantage of one-stop financial services. Before the advent of e-commerce platforms, the business of used cars was based on person-to-person negotiation."Now our clients can access vehicle valuations and quality reports from Uxin. The closer we work with Uxin, the better the reputation we can build in the region," said Zhao Yonggang, who has cooperated with Uxin for 3 years.
Founded in 2011 by Dai Kun, Uxin participates in a number of business sectors including used car business to business (B2B) and business to consumer (B2C) services, as well as new car sales, motorcycle financing, automobile logistics, after-sales service, and more. Reportedly, Uxin penetrated more than 40% of the used car trade market in 2017. Chinese media reported that about 12.4 million used cars were traded in 2017. Uxin went public on NASDAQ as the first Chinese used car trading platform to be listed in the US stock market in June 2018.