Luxury car market spawns online buying sites

A Maserati on display at Alibaba's Tmall platform, where customers can purchase the luxury brand. [Photo/China Daily]

China's booming market for imported luxury cars has sparked the emergence of a number of new online buying platforms, including UGcar, a cross-border website.

The operation has just raised more than 10-million-yuan ($1.5 million) through the Series-A financing, led by Gobi Partners and Tianjin CaifuJiaji Investment Partnership.

Zhao Qing, its founder, said while e-commerce has been well-embraced by Chinese customers, "unlike tiny items selling on Amazon, the supply chain for online car selling is more challenging".

"Trying the O2O or the Internet+ model might seem easier－but actually not many have survived these models," said Zhao Qing, founder of UGcar.

Headquartered in the Tianjin Binhai New Area, UGcar comprises two companies: Tianjin Xinlinghang Information & Technology Company and Tianjin UGcar Sales Company.

The former runs and grows the online car-buying platform, while the latter deals with the actual auto trading. "We are not like any other online car dealer, as we are purely e-commerce," said Zhao.

"We don't have stores, but we do have our own supply chain, offering transparent pricing and one-stop servicing."

Similar in process to the US car comparison site True-Car.com, buying cars from UGcar saves the buyer 10,000 yuan, around a 10 percent discount on forecourts, he said, largely as a result of parallel importing of vehicles which has put it into direct conflict with authorized dealers.

The company also plans to expand into B2B.

Parallel importing means goods introduced into a country outside its conventional sales network.

Zhao admits that as well as pressure from main dealers, the company is also having to work hard to change the purchasing habits of consumers, to buy from them online, rather than from showrooms.

"I believe home delivery is the future, even though at the moment our customers prefer to try out cars at a store first. "It must be a good thing, if we can offer cheaper prices than offline showrooms."

The Chinese Ministry of Finance, together with the country's General Administration of Customs and State Administration of Taxation, recently raised the import tax needed to be paid on new goods bought online by more than 10 percent.

Ouyang Shijia contributed to this story.