Online group car purchase: a real story

Filed in Industry Watch 1 comments

Recently one of CIC’s analysts bought a car via “group purchase” (i.e. 团购) and shared her experience on our Chinese language seeisee blog here. I thought it was pretty interesting, so I have put a translation below. This one “group purchase” brought the sales of 55 cars to the one dealer who accepted it. Not too small…

I think this is a fine example of how IWOM is not only influencing purchase decisions, but also the way people make purchases.

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Group automobile purchasing is nothing new – we wrote about it on our Chinese blog in 2007 and in a recent IWOM watch. As a researcher specializing in automobile industry IWOM, I’ve watched these trends develop for some time, but I never thought that I myself would be part of a group purchase. Below I’ve outlined my experience for everyone.

Since I spend my working life studying auto IWOM and reading consumers’ views on, I’ve had my eye on a few car models for quite some time, and I’ve just been waiting for the right time to buy one. Not long ago, I saw a group purchase post about one of the models I’ve been thinking about and responded, and began my own group purchase journey.

First Steps: Normally a netizen will post a message in their desired car model’s forum stating the group purchase price, conditions, insurance, and other details. The message will also include a QQ group number for that group purchase. Anyone interested in participating in the group purchase can join the QQ group and continue discussing the details of the purchase.

Communication: Interested netizens join the QQ group and discuss the particulars of the group purchase with the group leader (generally, the person who initiates the group purchase is called the group leader, and those who participate are called group members). The group leader plays a very important role in the group purchase process. On one side, he communicates with group members and collects their specific requirements like the car model, color, etc. Sometimes, the workload is such that the group leader will distribute some of the workload to some group members.

On the other side, the group leader acts as the group’s representative in talks with car dealers, working to get the best deal for the group while at the time same time passing information back to the group and discussing counteroffers. In this way, the group leader is a window through which group members receive the latest information about their group purchase. Though this bi-directional communication, a dealer and the terms of sale are established.

Making the Purchase: The last step is to meet at a predetermined time at the car dealer to pick up the cars. At the dealer, the members of the group finally meet each other face-to-face for the first time.

It may seem that the group car purchase has ended, but in fact though the purchase process is over the after-purchase communication between the members is only just beginning.

Through the group purchase process, group members become familiar with each other, and, as they are all owners of the same kind of car, they tend to interact even more than normal netizens. Many group purchase group members continue to visit their QQ group, sharing their experiences with their new cars. Group members will often organize together again to purchase accessories and upgrades, or meet for offline activities. Once the group purchase is over, the group leader’s leadership position and influence continues on. When group members encounter problems with their cars, they often out of habit seek out the group leader, and future group purchases and offline activities are often organized by the group leader.

We’ve found that recently, as the global financial crisis deepens, car buyers have become increasingly rational. Group purchase posts are a common sight in every car forum. Group purchases are an excellent solution for car buyers seeking more value, and through group purchases new car clubs are formed from what was once an anonymous group of netizens.

Other group purchase articles for reference:
IWOM Watch Sep 16-30: Retailers reverse the “Group Purchase” trend
Interview on CBC radio about tuangou “group purchase” in China
CIC Watch July 16-31: Transformers arrive, “Group Watch” kicks in
Online tuangou “group purchase” giving offline retailers a run for their money

Posted by   @   26 February 2009 1 comments

1 Comments

Comments
Mar 5, 2009
6:45 am

wow nice share about china iwom blog… will take a look at this one…

Regards.
Angel

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