Why ecommerce companies found no mileage in vehicle selling
In the last few years, there has been a perceptible shift in the strategy of these auto players which have slowly graduated to displaying their upcoming launches on their own online sites.
However, most of these etailers have withdrawn this category. In 2016, multiple deals were struck with auto manufacturers including Mahindra & Mahindra, Kawasaki, Hero, Maruti Suzuki and TVS Motors, but over time these car makers and online marketplaces realised that vehicle buying is an experience which requires an offline presence.
Which means that in the last few years, there has been a perceptible shift in the strategy of these auto players which have slowly graduated to displaying their upcoming launches on their own online sites.
Things like insurance, financing and content are specialised and need more depth than traditional ecommerce, industry executives said.
Veejay Nakra, chief of sales & marketing, Mahindra & Mahindra, whose Scorpio was the first vehicle to be offered through this new age marketing initiative in 2014, said, “It opened up a new avenue for consumers to purchase vehicles. Later for the KUV100, we tied up with Flipkart, Car & Bike, and M2All.” Nakra is now upbeat about the company’s new launches like Marazzo, Alturas & XUV300 which were introduced on their inhouse portal mahindrasyouv.com to cater to the needs of the online customer.
Mahindra has witnessed a month-on-month increase vehicle sales through this platform. At an overall level, for personal vehicles, digital sales contribute roughly 10-15% of their all sales.
“These companies figured out that offering an end-to-end experience to customers through the marketplace structure would not be feasible, and hence they moved out of it. Now they only focus on selling accessories for vehicles,” said an executive from the auto industry who did not want to be named.
He added that while automakers received significant leads from ecommerce sites, they were worried about dilution of their brand value.
Snapdeal which was one of the prominent etailers to push this segment said that Snapdeal doesn’t stock this category anymore.
“We did sell them as an initiative for a while and with good results. However, it is not the part of our current portfolio, which is aligned with the needs of a value-conscious target audience,” said a company spokesperson. Flipkart, too, withdrew from selling cars and bikes.
Queries sent to Flipkart went unanswered.
Vivek Srivatsa, Marketing Head of Passenger Vehicle Business at Tata Motors, said that they do not offer their cars on any ecommerce platform currently but provide online booking facilities on their own brand websites. Tata Motors has addressed this growing need with the launch of something called ‘The Imaginator’ which helps a customer seamlessly view all options from the inside and outside, customize the vehicle with their own selection of accessories and proceed to booking the car with a dealer of their choice.
Changing customer preferences have contributed to this shift. M&M’s Nakra added that his company is seeing a mix of visitors from all geographies on online platforms with tier-1cities contributing approximately 65- 70% of the footfalls on their portal.
There has also been a rise of vertical car-aggregating platforms which now offer a more customised approach to the business, and hence some automakers have moved to platforms like CarDekho and Droom.