China's Geely eyes online car sales

10 December 2010

SHANGHAI: Geely, the Chinese automaker, is to start selling its vehicles through ecommerce portal Taobao, having finalised an innovative online retail deal.

The firm will sell its Gleagle cars on the website, with the Geely Gleagle Panda, a compact model, to go on sale from December 22.

A special-edition Panda will be available via the portal under a group-buying system, whereby a certain number of consumers have to sign up in order to pay a reduced price.

The initiative reportedly makes Geely the first automaker to set up a permanent sales operation on Taobao.

China now has the world's largest internet audience, with over 420m users, and its ecommerce market is expanding rapidly.

Additionally, Chinese car sales passed those of the US for the first time in 2009.

Mercedes-Benz turned to Taobao in September to sell 205 Smart Fortwo cars at a 23% discount using a group-buying system.

The models sold out within three hours.

Geely's Taobao presence offers information on the cars plus an ordering system.

Buyers must pay a small deposit of 288 yuan ($43, €32) on Taobao, with purchases to be completed at a local showroom.

"We will add more cars to the Geely store in the future, and also sell special editions which are only available on the Internet," Liu Jinliang, vice-president of Geely, told People's Daily.

While ecommerce is unlikely to replace the traditional car dealership, it could represent an increasingly attractive channel for cost-conscious automakers.

"By setting up an online store, we can save costs originally incurred for land, infrastructure, and human resources," Yang Xueliang, public relations director of Geely, said.

Data sourced from Reuters/People's Daily; additional content by Warc staff