Uxin sues Guazi for unfair competition, battle for car sources escalates

Recently, the public opinion battle between used car e-commerce companies Uxin and Guazi has spread from the commercial field to the legal arena.

"The case has entered the judicial process and everything is waiting for the trial." Recently, a Uxin official told NBD Auto (WeChat ID: NBD-AUTO) that Uxin's case against Guazi for unfair competition has been accepted by the Chaoyang District People's Court of Beijing.

Unlike Uxin's high profile, Guazi refused to comment too much on the matter. But NBD Auto learned that even though Guazi has always hoped to downplay the lawsuit, dealing with this sudden lawsuit has become one of its main tasks internally.

A used car industry insider told NBD Auto that for used car e-commerce companies that rely on financing to maintain their business, car sources and transaction volume are key indicators for attracting investment. Therefore, most companies have a "zero tolerance" attitude towards negative news.

In 2016, the domestic second-hand car transaction volume exceeded 10 million for the first time. But at the same time, the second-hand car e-commerce that has been around for many years has been questioned because of its low total volume and slow turnover.

E-commerce competition points to vehicle sources

Not long ago, news about Uxin's "falsification of vehicle source data" was reported, which subsequently attracted attention. In a related report on February 20, Southern Metropolis Daily mentioned that Uxin packaged the information of sold vehicles as vehicle source information to create the illusion of a large number of vehicle sources, thereby creating the illusion of "massive vehicle sources" and a large-scale platform, with the purpose of attracting capital investors to these key indicators that reflect their own advantages.

NBD Auto learned that Uxin believed that it was a competitor that was "slandering" it, so it announced a lawsuit, requesting that Guazi stop fabricating or spreading false facts, or instructing others to fabricate or spread false facts to damage the plaintiff's business reputation or product reputation, publish a statement in national publications or its official website to eliminate the impact, and compensate for economic losses of 30 million yuan.

In fact, the business models of Uxin and Guazi are not exactly the same. According to the corresponding positioning, Uxin mainly operates B2C (business to consumer) business, while Guazi's business is a C2C (consumer to consumer) model that avoids middlemen. However, in Uxin's business, the C2B (consumer to business) business that attracts car sources for used car dealers has also become one of the focuses. Under this circumstance, the competition for car sources between Uxin and Guazi has become fierce.

"The source of vehicles has always been the focus of competition among used car e-commerce companies and even all used car dealers." Luo Lei, deputy secretary-general of the China Automobile Dealers Association, told NBD Auto that in last year's used car market, models with a car age of less than three years had the highest turnover rate, and this part of the source of vehicles accounted for only 23%.

In 2016, the domestic second-hand car market transaction volume was 10.39 million vehicles. According to the forecast of the China Automobile Dealers Association, the second-hand car transaction volume this year will achieve a 20% increase. If this increase is achieved, it will be the largest increase in the second-hand car market since 2011. In the view of the Automobile Dealers Association, the release of a large number of vehicles will be one of the important reasons for this year's growth. The expectation of the release of vehicles has increased the enthusiasm of second-hand car e-commerce platforms to compete for vehicle sources.

"The number of vehicle sources places high demands on brand competitiveness." A person in charge of a used car e-commerce platform told NBD Auto that the used car e-commerce platform's attention to brands will be related to the competition for two important resources: investment and vehicle sources.

A "mutual black fight" with no winner?

However, in the industry's view, the problems of used car e-commerce are not limited to the source of cars.

NBD Auto learned from the Automobile Circulation Association that according to the latest statistics, in December last year, the transaction cycle of used cars on online platforms was 51.4 days, which is far behind the transaction cycle of offline platforms, which is 24.7 days. In addition, according to the statistics of the Automobile Circulation Association, in June last year, the transaction cycle of online platforms was 38.9 days. After half a year of development, the transaction efficiency of online platforms has actually declined.

"The proportion of online transactions of used cars is still relatively low." Luo Lei told NBD Auto that according to statistics from the Circulation Association, in December last year, the total number of vehicles uploaded to B2C e-commerce platforms was 164,000, of which only 9.76% of the vehicles were traded that month. The online platform accounted for 1.49% of the overall transaction volume of used cars that month. Judging from the situation throughout last year, the share of used car e-commerce was less than 10%.

In this regard, the person in charge of the used car e-commerce company told NBD Auto that for the used car market, the core competitiveness of online transactions should be standardization, scale, and solving information asymmetry. However, for most used car e-commerce companies, this goal has not actually been achieved.

"From what we have observed, complaints about used car e-commerce companies, including complaints about accident cars and cars purchased that do not match the description, are the main problems," the head of the used car e-commerce company told NBD Auto. "For used car dealers, they are also more inclined to put some cars that are difficult to trade offline online."

Therefore, in the view of some industry practitioners, the current problem of used car e-commerce is not the competition among each other, but the need to work together to expand the market and establish credibility and standards. Therefore, no matter who wins or loses the lawsuit between Youxin and Guazi, it will be a loss for the used car e-commerce as a whole.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.