Businessmodel of BitAuto Group

Customer Segments

Bitauto primarily caters to auto dealers (new as well as used car segments) and automakers. The two main customer groups are as follows:

• Major Automakers – The growth of automotive industry has attracted most of China’s major automakers to place advertisements on the company’s website. Of the approximately 82 automakers in China, 77 place advertisements on the company’s website. It also provides digital marketing solutions to many well known automakers in China. The company has internet marketing service agreements with 63 automakers.
• New / Old Car Dealers – The company has over 24,000 new car dealer subscribers annually and enters into service agreements with subscribers to use its EP platform, primarily consisting of new car dealers. Used automobile listing customers increased have increased from 5,200 in 2013 to over 9,000 in 2014 and to approximately 19,000 in 2015. ### Value Proposition

Bitauto distinguishes itself from many of the general advertising agencies with its in-depth knowledge of China’s automotive industry and ability to offer integrated advertising solutions to automakers.

The company takes care of all aspects of online advertising for its customers. An in-house creative team works closely with automakers to make strategic plans and produce digital advertisements. It also ensures website creation and maintenance services with interactive and multimedia technologies and has extensive experience in handling automaker customers’ daily online media interactions.

Additionally, the company’s EP platform business enables dealer subscribers to create their own online showrooms, list pricing and promotional information, provide dealer contact information, place advertisements and manage customer relationships, which help them effectively market their automobiles to consumers.

Channels

Bitauto has employed an experienced sales force across 186 cities to increase its market penetration.

It also acquires customers through its website. Its bitauto.com and taoche.com brand names are well recognized throughout China’s automotive industry and its relationship with partners is well established within the internet marketing industry.

Besides, the company continuously sponsors and organizes events, publishes newsletters and participates in automobile exhibitions to expand its footprint.

Customer Relationships

To enhance customer experience, the company provides customer services and training to dealer customers to help them fully utilize the potential of EP platform and applications.

Continuous education and training to sales force ensures and conveys the advantages and usage of bitauto.com and taoche.com websites as marketing channels.

Sales and customer support teams also provide dedicated offline assistance to potential car buyers, which facilitates completion of transactions.

Key Activities

Bitauto’s business model caters to the needs of new and used auto dealers as well as to automakers which enables them to advertise, promote and market their products.

Key Partners

Bitauto has partnered with over 590 internet service providers in China to distribute its dealer customers’ automobile pricing and promotional information.

It has partnered with JD.com, the leading online direct sales company in China, and Tencent, a leading provider of comprehensive internet services to engage in online automotive financial platform business.

Bitauto also has joint ventures with KBB and CADA that provides exclusive access to extensive data on China’s used car market.

Key Resources

Bitauto has an extensive sales and service network with representative located across 186 in China and has plans to continuously expand network.

Its database is a rich source of information for customers with pricing, promotional and automobile dealer business information. It has business and contact information of over 38,300 new automobile dealers and used car sellers, over 24 million listings of new automobile pricing and promotional information as well as 2.3 million used automobile listings.

Its internet services are supported and enhanced by a team of more than 800 experienced and dedicated product development employees, including many industry experts with in-depth knowledge of automotive and information technologies and online marketing.

Cost Structure

The company’s biggest cost driver is selling and administrative expense, a fixed expense, which accounts for 75% of revenues. The company continuously invests in its sales and marketing personnel as well as marketing expenses to promote brand image.

The second major driver is cost of sales that includes fees paid to business partners and service cost for employees directly involved in revenue generation activities.

Revenue Streams

Revenue is primarily generated form automobile dealer subscription services through a proprietary EP platform, which enables customers to manage their online marketing efforts via a web browser-based and mobile-based interface.

Advertising revenue is the second major source of sales. Bitauto generates most of its advertising revenues from new automobile advertising revenues through selling advertisements to automakers.

Additionally, the company also generates revenues from the service fees paid by our customers, principally automakers, for the digital marketing solutions its provides, which include website creation and maintenance, online public relations, online marketing campaigns and advertising agent services.