(Yicai Global) April 4 -- Chinese auto e-commerce firm Hangzhou Souche Automotive Services Co. has completed its merger with Cheyipai.com, a used car trading platform operated by Beijing Dianfeng Technology Co., it announced yesterday, in another sign of China's second-hand car e-commerce competition further intensifying.
The merger will accelerate the creation of a new second-hand car trading platform, said Yao Junhong, Souche founder and chief executive. Cheyipai will still maintain its independent brand and operation system post-merger. The team and organizational framework will also remain unchanged to form a strategic and collaborative synergy with Souche's business, Yao added, as the tech information online outlet 36Kr reported yesterday.
Formed in 2012, Souche is an e-commerce technology provider that supplies SaaS (Software-as-a-Service) products to new automobile and used car dealers. The company's system has 330,000 monthly active accounts covering more than 110,000 car dealerships and it is projected to have realized an online retail transactional volume of CNY150 billion (USD23.85 billion) last year.
Cheyipai, which formed in 2006, is one of the earliest previously-owned car dealers in China. It started a second-hand car online trading platform in 2010. Its network now extends to 614 cities nationwide and has evaluated and moved over 3 million used vehicles.
Competition in this sector is becoming increasingly savage in China. Market leaders include Beijing-based Uxin Group -- one of the country’s largest online used car auction service providers -- Tencent-backed Beijing Shanyi Shanmei Technology Co., which operates Renrenche.com, and Guazi.Com Inc. The merger of Souche and Cheyipai will add a strong new contender to this array.
A Chinese government white paper proposed completely abolishing restrictions on the migration of used cars among different cities last month, a development which will further promote the explosive growth of the previously-owned auto market. China’s total car ownership is 217 million, and last year’s cumulative used-car trade volume hit 12.4 million units.