What can you get for 5000 yuan? An iPhone, perhaps, or a new wardrobe, maybe a week of meals at some expensive restaurants.
But none of that would last for long, and might not have not much use. Which is why Cindy Wang, the CMO of Youxin, has a different suggestion: buy a used car.
Speaking at PingWest’s own HAY!17 conference, Wang said: “For a Chevy Cruze you only need a first payment of 4000 yuan, and then 1000 a month after that, or the equivalent of 30 Starbucks lattes. We are making it easy for three hundred million Chinese families to own their first car. You only need a 10% down payment of less than five thousand yuan, and you can drive away with a car.”
The Chinese market doesn’t hold much love for secondhand cars. Wang asked the audience how many of them had purchased a used car, with only one person out of several hundred raising their hand. More representative data shows that the ratio of used to new cars in the United States, for example, is 3:1, while in China it is the reverse, meaning that used cars make up only a fraction of those on the road.
The strategy for used car platforms like Youxin is, first, raise awareness among consumers with advertisements, and then try to make them more accepting of used cars. And so they have been flooding every channel with ads, from alleyways, subway stations, websites, and movie theater screens. Hundreds of millions of yuan are being put to work to try to shift cultural acceptance of secondhand car ownership.
In the fourth season of The Voice of China, Youxin broadcast a 60 second ad in which a series of celebrities were accompanied by a repeated, rapped line urging viewers to get a Youxin car. With its frenetic, record-scratch editing, it made something of a splash online, though the reaction to it was mixed, with some questioning if the brand was not too “low.”
Wang said that the ad did gain Youxin a lot of exposure. At the time, the nascent industry was eager to get out in front of consumers; any exposure at all, by whatever means, was worth it.
But in the short time that has followed, there’s already been an evolution in the field. Consumers now have a concept of secondhand car sales, and have begun to recognize individual brands and develop impressions of their quality. Youxin hopes to make secondhand car buying “cool,” pushing back against a stigma of inferiority that has been associated with buying something “less” than a new car.
But for many would-be car buyers, even if they’ve gotten past the false embarrassment of buying used, one thing that can still put them off is the complexity of the market. Secondhand cars can’t easily be standardized and compared, since even two of the same model and features might differ on how much they’ve already been driven. And rather than deal with the uncertainty of trying to assess the wear on a used car, many just give in and spend the extra money on a new one.
“The used car market abroad has been around for 50 or 60 years, and it’s more mature. But we don’t have a public system in place, so we have to rely on a company like Youxin to promote and establish a trustworthy system and standards.”
Wang said that Youxin currently has more than 200,000 cars available for sale, and that all of them are inspected on a 158 point checklist. It hopes to cover every segment of the process of buying a secondhand car, helping consumers with inspections, price estimates, consultations, selection, and aftersales service, pulling out every obstacle and deterrent to buying secondhand.
With most sellers in first and second tier cities, and buyers in third and fourth tier cities, Youxin has pushed its sales channels to lower tier cities and using pop-up stores, sales holidays, and other approaches to build up consumer awareness. And there is reason for them to push aggressively. Secondhard car sales in China reached 10 million in 2016, and late last year surpassed new car sales, with Youxin responsible for 1.25 million sales as of August.
“Acceptance of secondhand cars has grown fast,” Wang said. Getting used to buying them online may not be far behind.