BEIJING – Renrenche.com, an online C2C used car market place and transaction platform backed by a venture capital firm led by Xiaomi CEO Lei Jun, expects transaction volume of used cars on the platform to hit 10,000 units a month in 2016, according to Li Jian, founder and CEO of the company.
Li made the comments at the Global Mobile Internet Conference (GMIC 2015) held in Beijing on April 28.
“If that happens, we will become the world’s first online vehicle transaction platform to reach that transaction volume,” said Li, who previously worked at Baidu before founding the company a year ago.
Renrenche.com launched its services last July. It received a $5 million Series-A funding from Redpoint Ventures and later in November $20 million Series-B financing from Shunwei Capital, founded by Lei Jun, and Ce Yuan Ventures. Its services are now available in 15 major cities including Beijing, Shanghai, Guangzhou and Shenzhen.
According to Li, Renrenche.com currently has about 2,000 used cars available for sale in Beijing and more than 4,000 nationally. About 500 used cars exchange hands per month in Beijing through the platform.
“About 70 percent of the cars on our platform are sold within 10 days of listing,” said Li. “The entire transaction process is usually completed within an hour and the seller doesn’t even need to step out of his/her home.”
What Renrenche.com is trying to accomplish, according to Li, is to solve top concerns of both the seller and the buyer during a typical used car transaction process – trust, hassle, privacy and pricing. It is also trying to solve the issue of information loss and asymmetry from used car brokers.
“Our aim is to bypass the auction platforms, the brokers and individual scalpers so that the seller can sell the car for 15 percent more and the buyer can buy it for at least 5 percent less than if they go through a broker,” said Li.
Renrenche.com offers door-to-door service, privacy protection, trade assurance and carefully chosen used car sources. It also provides 249-point vehicle inspection, one year or 20,000 km warranty and certified repair and maintenance service. Buyers are also able to return or exchange the vehicle within 14 days if they are unhappy with the vehicle.
“When the internet and used car come together, it means extreme experience and speedy communication,” said Li. “We want to provide a service that links buyers and sellers directly burden-free.”
Renrenche.com currently offers used cars that are within six years old, a segment that accounts for 78 percent of the 130 million vehicles on the road and is rapidly rising. Last year, China sold 24 million new vehicles, more than three times the 7 million used vehicles sold. But the U.S. is just the opposite: new vehicle sales there were about 16 million units, about one-third of the 45 million used vehicles sold.
“China’s used vehicle market potential is huge. It can grow at least ten-fold,” said Li.