Birds of a ‘feather’ are MORE Financeable Together


The e-commerce industry is in a state of expansion and consolidation.

Currently, more consumers are buying online than any industry had ever imagined. Fundamentally it has changed every single major retail market, except one—the automotive market.

Automotive retail has not transformed much since the beginning of the Indian automotive industry in the 1940s. Consumers still follow the same old process—researching, contacting the dealerships, test driving, financing, and closing the deal, and e-commerce has a minuscule part to play in this entire process. However, after seeing the rising acceptance of e-commerce retail and digitization in today’s scenario, we might be led to expect that automotive retail too can be altered to fit into the dynamics of e-commerce.

The question is—is e-commerce in the automotive industry going to become the norm?

According to automotive experts this is possible, and the process is already on the fast track to fruition.

To begin with, online sales channels have altered how manufacturers, dealers and even aftermarket ancillaries market their products online. Most of them are using web tools to drive consumers to showrooms and ratchet up sales. While consumers utilize these mostly for research. Given the present scenario, automotive consumers in India have fewer options to buy cars online and most of them deal in pre-owned or used vehicles anyway. Portals like Droom, Cardekho, Quikr and Olx have put consumers and the user experience in the spotlight, thereby helping the manufacturers to attract more users.

“E-commerce portals like the ones mentioned above are typically used car marketplaces that help car buyers research, do comparative studies and help them in their buying decisions. That is an important function, but in this case, the real transaction happens face to face. It’s a blend of the lead being generated online and the final conversion happening offline because of the nature of the product,”

says Vardhan Phadnis, Chief Sales Officer at Shoptimize which helps brands in building their D2C e-commerce websites.

The crisis wrought by the pandemic has impelled trends to change and consumers are more apt to choose e-commerce portals over physical shopping and vehicles too are now falling into the category of goods being purchased online. According to an analysis by the advisory firm, Grant Thornton Bharat, due to Covid-19, along with many other reasons, the automotive industry players are moving fast to adopt digital means to serve consumers and promote online sales.

Rahul Kapur, Partner-Growth at Grant Thornton Bharat says, “The strong emergence and acceptance of the online channel has provided an impetus to seamless solutions, price discovery, transparency, digital real-time payments along with certification on the quality of the vehicle for the consumers in the auto sector.”

A channel now widely invested in by automotive players

Prior to Covid-19, consumers were already rummaging through online platforms, to begin their vehicle purchase journeys. As per Google, 92 per cent of car buyers research online before they buy. The time that they spend on researching and comparing equals to an average of 8.5 hours. By the time these consumers arrive at a dealership, they already have all the details of their preferred vehicle at their fingertips and are more or less committed to the purchase.

This makes it evident that digital media is playing a crucial role in determining the purchase decisions of car buyers. Also, the growing base of internet and smartphone users is further boosting this digital transformation and has led to an expansion in the market size of various e-commerce portals.

This fact makes it necessary for the players in this field to invest more in the e-commerce arena.

As digital has become an increasingly important aspect of our daily lives, every industry and manufacturers are already focused on setting up an e-commerce entity –and that includes automotive players as well.

Meanwhile, Covid-19 has only further fuelled this process, making it more critical, business wise as well as health wise.

A survey titled the Automotive Consumer Canvass by Carwale and CEAT, also substantiates the interest of consumers in buying vehicles online. 

After questioning over two lakh potential 2 and 3-wheeler customers, the survey reveals that online platforms have emerged as the preferred marketplace for buying a vehicle with a majority 60 per cent of respondents showing a willingness to buy vehicles digitally. Besides, 54 per cent of the 77 per cent respondents who had deferred their decision to purchase a car were keen to own one in 2021.  

“It’s not surprising that 60 per cent of them show a willingness to buy online. For most first-time car or bike buyers, the process can be quite cumbersome. Hence, companies across the board are putting the effort into making the process digital and hence, more convenient,”

says Banwari Lal Sharma, CEO of CarWale and BikeWale.  

That is why, a majority of Indian automotive players have introduced online sales platforms, to service customers and drive sales. According to a Capgemini survey, consumers who prefer online channels to find information about cars, are up from 39 per cent before the pandemic to 46 per cent and growing as of April 2020.  

Digital retail: What India Inc. thinks

The Indian automotive industry is on a progressive growth trajectory.

Even with much obstruction and economic difficulties, as per the market reports, India’s automobile market is estimated to grow more than ‘2.3X’ from $222 billion currently to $512 billion by 2026 with a CAGR of 12.7 per cent.

Inside article1-Can e-commerce change the way we shop for vehicles in India

The industry has been very receptive to major transformations over the years, whether it is in the usage of technology in manufacturing, increasing reforms to curb vehicular pollution, or the entry of international brands into the Indian market.

Going forward, industry experts aver that soon Indian consumers will enjoy the ‘phygital’ buying experience which comes along with e-commerce auto retail.

“As we advance, I feel that it will be impossible for the automotive industry to succeed without focusing on digital and online mediums,” says an expert from the e-commerce field, Vaibhav Lall, founder at Khojdeal.

Adding to that, Shoptimize’s Phadnis says, “Automobile businesses that aspire to digital success should make the user experience seamless by providing enough information on their websites and enabling online bookings for showroom visits or test drives.”

There are some major reasons behind why online media are gaining in popularity. Through these portals, consumers are getting better deals and more convenience during the buying process. These portals are also engendering more trust in vehicle manufacturers in the minds of consumers. Finally, the transparent purchase process coupled with concerns about hygiene at dealerships, is further boosting the success of the online automotive marketplace.

We cannot deny that it is human tendency to educate ourselves and make ourselves more aware before making any buying decisions. As vehicle purchasing in India is quite an investment, people like to know what they are getting into. And online websites with omni-channel strategies and services are just the right solution.

Commenting on this, Phadnis opines that online research has become the most important aspect in influencing the purchase decision, “Today’s consumers are increasingly tapping into technology and accessing real-time information available on official automobile brand websites as well as on online reviews, blogs and Q&A platforms like Quora,” he says.

Online queries are the sparks that are driving sales

Another factor that has contributed to the growth of online automotive retail is an uptick in the number of sales.

The protocols of the new normal—social distancing and online shopping, consumers proclivity to own personal vehicles, health factors, and digital modes of interaction throughout the purchase cycle, have resulted in a spike in online queries and sales. As per a Google survey last year, many OEMs witnessed higher quality leads and a two-to-four-fold increase in their website’s traffic. While, the average number of visits to auto dealerships in India fell by 50 per cent.

For example, car maker Maruti Suzuki saw a five-fold increase in sales through digital means, which now stands at 20 per cent of their total sales. Similarly last year, Nissan witnessed a spike in online bookings for its Magnite range, 40 per cent of which came through their online platform. Also, digital solutions catered close to 30 per cent to Hyundai India’s sales inquiries, stated a Google report.

At the same time, other manufacturers such as Tata Motors, Kia, Audi, Mahindra, and Hero among many others have their own digital channels for consumers. Not only this, adding on to their digital services, these OEMs are also adopting end to end solutions—from launching new vehicles to providing online banking and finance options to their consumers.

“These changes in consumer’s buying and research preferences signal a shift for the auto sector, and Covid-19 played a big part in the online channel gaining traction. Technology-enabled innovations like secure digital payments, hyper-logical logistics, analytics-driven customer engagement, increasing consumer awareness and digital advertisements are likely to support this growth going forward,” says Kapur.

As per a GT Bharat report, other factors such as a rising middle class and a growing population of young people with increasing disposable incomes will further drive growth in this sector.

Furthermore, the ease of owning a vehicle through the availability of multiple…



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