Automotive ecommerce sites are growing. A few of these are catering to commercial vehicles.

Story by: Bhushan Mhapralkar

Close to 6,52,591 new commercial vehicles were registered in 2015, in India according to Organisation Internationale des Constructeurs d’Automobiles (OICA) over the registration of 6,06,232 new commercial vehicles in 2014. A total of 23,366,066 CVs were registered the world over in 2015 over the registration of 23,205,661 CVs in 2014. This statistics comes amidst a growing awareness for fuel efficiency, emissions, reliability and total cost of ownership as buyers set out to shop for new and used CVs. Emerging from under the shadow of a slowdown, which forced many transporters (operators) to employ drastic measures, sales of commercial vehicles have begun revving. At this conjucture, internet looks poised to play a greater role. It is, in fact, in other parts of the world, already playing a considerable role. Automotive ecommerce, according to Roland Berger analysts based in China, is growing at a rate of 30-40 per cent in that country. It is expected to breach the CNY 225 billion mark soon. Stressing on the need to build an ecosystem, which is critical to activate the base users of the aftermarket and OEMs, the analysts opined that automotive ecommerce has become the most popular buzzword for the industry where not only the vertical media, OEMs and general online dealers have taken a leading position. Even dealership groups are actively joining this battle for a slice of the cake. In India too, the ecommerce battle is spreading. Interesting advertisements that appears often on the television is a case in point. For a country that ranks second to China in population, and where 54 per cent of the population is below 25 years of age, automotive ecommerce is fast catching up. With the number of internet users at 243 million, India is the third most internet savvy country after US and China with a share of 8.33 per cent.

Automotive ecommerce in India

Electronics goods transaction over the internet is quite intensive in India. Automotive transactions, in comparison, are nowhere close, and even though they are catching up. According to Sarah Smith, Research advisor at Reportbuyer.com, auto ecommerce transactions are limited by hinderances like registration process at regional transport offices (RTOs), pre-delivery checks and financing activities. Activities therefore, Smith opines, will be general in nature. They will be limited to general, technical research, pre-booking, bids, and short-term deals. Smith drew attention to Ford India increasing its digital marketing spends. She pointed at the online and digital campaign of EcoSport. Skoda India initiated an online sales project in association with Carwale.com in 2009. Late last year, Snapdeal.com, an online marketplace, announced a partnership with Hero MotoCorp Ltd to sell the company’s two-wheelers, and expects its automobile category to generate Rs. 1000 crore worth of business in a span of six to 10 months. According to Tony Navin, Sr. V P, Snapdeal.com, the company is also talking to other automakers to take their products online. Mahindra has unveiled M2All.com to offer an exciting range of products and services involving a ‘click and brick’ model. The ecommerce model links Mahindra dealers, distributors and logistics teams. For a two-wheeler and passenger car buyer, the internet may serve as an attractive medium for research if not for transaction, for a CV seller or a buyer too it is turning out to be an interesting proposition. Apart from Olx.in and Quikr.in, which are general in their nature of business, two ecommerce sites dedicated to CVs have sprang up in the last one-to-two years. One is truckbussale.com and the other is truckaurbus.com.

CV ecommerce platforms

Truckaurbus.com and truckbussale.com are dedicated sites for CV sales. If truckaurbus.com claims to sell new and used commercial vehicles, truckbussale.com deals in used commercial vehicles only. Competition to these two ecommerce sites stems from general ecommerce platforms like Olx.in and Quikr.com. A search on Quikr.com turned out 21,234 results under the category of commercial vehicles. Results for buses were 1296, and for trucks were in the region of 6000. Others included vans, rickshaws, etc. A search in Olx.in for commercial vehicles revealed 23,459 entries, ranging from a Maxximo SCV to a Volvo luxury bus. Search for rickshaws yielded 8,013 entries. Over the number and the expanse of Olx and Quikr, ecommerce sites like truckaurbus.com and truckbussale.com seem to focus more closely on the CV industry. Of the two, truckbussale.com was born out of an excessive knowledge to develop ERP platforms for the sugar and bitumen industry, which rely considerably on transportation, Ullhas Ambegaonkar, founder partner of truckbussale.com, opined that this has proved to be a good medium to diversify into. Son of a farmer from Latur, Ullhas utilised his IT skills to come up with an effective ERP solution. It is here that he found that the sugar industry needed trucks to transport its produce. The demand was however seasonal, and the need was therefore for used trucks. Quite unlike the Bitumen industry, which needed new trucks. Ulhas incidently worked with the Bitumen industry as well. What started as a friendly endeavour to connect truck sellers to buyers led to the formation of truckbussale.com. “We found a huge demand and supply gap. We also found that the buyer was strapped for cash. Also, the broker is the only non-transport personality involved in the transactions, and yet amounts to a big cash burden to the buyer and seller. Lack of info makes the broker important and the buyer and seller are vulnerable to his or her whims and fancies,” expressed Ambegaonkar. Focusing on the development of a credible platform for used CV transactions, truckbussale.com team is attracting surprise enquires from Africa since buyers there find the trucks listed on the site suitable. Interestingly, truckbussale.com does not indulge in documentation, but takes the pain to verify the seller, and his ware. It has plans to set up a service station, which will also prove to be a touch point for the site. Questions sent to Truckaurbus.com did not elicit response until the time of going to press.

OEM view

As the third most internet savvy country after US and China with a share of 8.33 per cent, exposure to ecommerce is expected to rise to good heights. In case of used commercial vehicle transactions, reliance on OEMs may not be of importance. Not with new CVs. Opined Kapil Sharma, SML Isuzu spokesperson, that ecommerce sites will create a good deal of competition in the CV market but only if it is operated by a knowledgeable team. “In many cases we have seen that the information related to specifications and prices listed are wrong. This leads to misguidance. A price of a bus is mentioned as Rs. 12 lakh rather than Rs. 13 lakh. Such wrong information over a third party website could create confusion and a loss of faith in the local dealer as well as the OEM,” he added. Other issues highlighted by an OEM representative include a wrong image of the product. SML Isuzu, according to Sharma, receives genuine business enquiries from its site from all over the country. Opined J Shankar Srinivas, spokesperson for Isuzu India, “The world is changing and so are the expectations of those who would like to explore uncharted territories. Digital domains have been successful as ecommerce solutions. They are however clearly restricted to low-value goods. In relation to new commercial vehicles, the buyer is still far from this domain. This is due to the fact that when you buy a commercial vehicle (or for that matter even passenger vehicles) the factors leading to a buying decision cannot be fulfilled online.” Srinivas drew attention to the need of a vehicle buyer to check out crucial as well as comforting factors like dealer infrastructure to ensure the capabilities of service, explore financing options and other related aspects. His sentiments echoed that of Sarah Smith who pointed at almost the same hinderances, which would keep the auto ecommerce activity largely general rather than be specific. Added Srinivas, “Vehicle buyers do not buy with a credit card. Varied financing options have to be explored. On high-value purchases, financiers will take interest in checking the credit worthiness of the buyer. In our opinion, the reality of ecommerce for commercial vehicles would still remain in the dominion of imagination.” Daimler India Commercial Vehicles spokesperson opined, “We think that ecommerce has emerged as India’s new sunrise industry, especially in verticals such as retail, travel, tourism, food and beverages. We strongly believe in offering quality products coupled with technology, reliability and efficiency. We sell our trucks through our dealerships where we have well trained consultants who consult as well as understand the true requirements of our customers. Customers too are keen to have a test drive and evaluate the benefits. They are keen to make an informed purchase decision.”

Dealer view

To dealers, ecommerce platforms may not be a bone of contention afterall. A few that CV spoke to are of the opinion that authenicity is always going to be an issue while making a buying decision with the help of an ecommerce site. Some dealers expressed that, out of the two types of commercial vehicle buyers — owner-operator and fleet-operator, it is the owner-operator who could be lured by the promise of higher discount, accessories, extended warranty schemes, etc., which ecommerce sites may come to offer. However, despite the ‘pull factors’, a CV buyer will still want to touch and feel, and test drive the vehicle, they claimed. A case in point is the view expressed by Jagdish Mitra, Chief Strategy Officer, Tech Mahindra, at a Federation of Automobile Dealers Association (FADA) event in Mumbai recently. Underscoring the relevance of dealers having an online presence, Mitra averred, “In today’s changing business environment, digital presence and dealer outlets can co-exist.” “It is time to be ‘Digical’ (digital and analogue),” he added. Industry sources claim that dealer outlets will continue to exist. Their relevance as an interface between the OEM and the buyer will only increase, but not without the fact that competition in sales, however small or less effective, will come from ecommerce platforms as well.

There’s little doubt that internet is poised to play a greater role. It will also provide ample support to ecommerce platforms, including automotive ecommerce platforms. In the commercial vehicle space, ecommerce platforms will find a place to grow as well. This will present the buyers with a wider choice. However their ability to disconnect from the physical (showroom experience) purchase experience is highly doubtful. This will give rise to a new way of buying, which Mitra effectively managed to term at ‘digical’. The ‘digical’ way of purchase will also ensure that ecommerce platforms find a way to grow along with the dealers, and help the buyer make an informed decision.