With more than 300 million cars registered in China, the market has sufficient depth for many different platform models. However, precisely because of the size of the market, competition is fierce across all sub-verticals.
Second hand car marketplaces is one of these sub-verticals. The three leading players – Uxin (which is NASDAQ-listed), Guazi & RenRenChe – have all invested hundreds of millions of dollars of advertising dollars:
Uxin is the only among the three to list, giving its investors the opportunity to exit.
Guazi, an affiliate of 58.com, is rumoured to be in talks with Softbank for an US$1.5 billion financing. At about the same time Uxin actually accused Guazi of inflating financial numbers.
How about the third one?
There are very recent rumours that RenRenChe is either “bankrupt” or at the verge of doing so.
RenRenChe’s PR has been quick to dismiss the rumours. However, an internal memo from the CEO basically encouraged employees to become “partners”, basically resigning from full time posts to become commission-earning agents.
Hard to dismiss the correlation between this de facto downsizing and Softbank’s rumoured funding of its competitor.
No longer ‘asset-light’
Meanwhile, Guazi is focusing its attempt offline, opening its own stores to serve customers directly.
It seems the online, TV & lift channels are reaching saturation in terms of effectiveness.