Guazi offers auto leasing on Tencent’s WeChat
17 Jul 2017
Guazi ershouche (瓜子二手车), China’s leading c-to-c, used-auto transaction platform, launched a “micro program” on Tencent’s social network and chat platform WeChat (微信). The micro program is called “Get a new auto with a 10-percent down payment” (付一成新车).
The offer makes use of several recent Guazi initiatives and collaborations, including auto financing and in-house credit scoring.
It purportedly uses big data to determine a potential consumer’s credit score, before providing financing on what it calls a “1+3 mixed-lease model”. The pre-credit assessment system is supported by Tencent-backed private bank WeBank (微众银行), as well as Baidu Finance (百度金融).
The offer aggregates financial leasing products from participating institutions. Down payments can be as low as ten percent, the first year is conducted on a leasehold basis, after which the customer has the right to purchase the vehicle at the value of the remaining balance excluding these lease payments.
Three-year financing plans are available for those electing to purchase. Unlike other financial leasing products, such as those of Taoche.com and Tangeche.com, Guazi at this point is not offering the option to trade in a leased model for a different one, although a company representative said the feature might be added in future.
The offer is currently operational in more than 12 Chinese cities.
Financial leasing was popularized in China by Tangeche.com (弹个车), a subsidiary of Souche.com (搜车). Tangeche.com too has been using 10-percent down payments on new cars as a selling point.
Guazi’s new “micro program” follows on the heels of the release of Taoche.com (淘车), a new site from Yixin Group (易鑫集团, otherwise known as Daikuan.com, Yixin Chedai or Yixin Capital Ltd.), an auto-financing and transaction joint venture between Bitauto (易车, NYSE: BITA), Tencent (腾讯), JD.com (京东), and Baidu (百度).
Taoche.com offers a financial leasing product called Let’s Go (开走吧). Let’s Go offers the opportunity to get a new vehicle with a down payment of only 10,000 RMB ($1,480 U.S.), and the opportunity to either buy the vehicle outright or upgrade to a different model down the line (which we reported on here).
Earlier this month Guazi, working again with Baidu Finance, issued its first asset-backed security (ABS) product (which we reported on here). ABS products, collateralized debt obligations, are increasingly being used to raise funds by a range of companies providing auto financing in China, most notably Bitauto (NYSE: BITA) and Tencent-backed Yixin Group, which has made numerous such issuances.
In November 2016, Guazi teamed up with WeBank to provide its first ever in-house financing products.
Guazi estimates approximately 50 percent of the users of its platform is in need of some kind of loan, but only approximately five percent of used-vehicle purchases in China are currently financed by credit.
The “micro program” is another example of the ever-growing inter-relatedness of members of the 58.com (NYSE: WUBA) family tree (Guazi was incubated by 58.com before being spun off in 2015, and 58.com currently holds an estimated 46-percent stake in the company) and Tencent. Tencent currently holds a 23-percent stake in 58.com. (In turn, Naspers holds 34 percent of Tencent – editor.)
Recent data from data analysis sites TalkingData, QuestMobile and big-data platform “Qianfan” (易观千帆), consistently indicate that Guazi is pulling away from the pack in terms of mobile users.
TalkingData’s app ranking (based on total users, active users and comments and reviews) for May, has Guazi ranked first among used-auto platforms. Data of Analysys.cn for May, confirmed that Guazi was tops in terms of “user stickiness” (how long the average active mobile user spent on the platform). In May, Guazi’s average length of app use was three times greater than rival RenRenChe (人人车) and five times that of Uxin (优信二手车).
QuestMobile’s ranking (based on duration of use, growth rate and other trends in mobile use), covers Q2 of 2017, and saw Guazi in 134th position overall, but No. 1 among used-auto platforms. According to QuestMobile’s data, Guazi’s MAU for Q2 of 2017 was up 48 percent year-over-year, while the MAU of RenRenChe fell 26.7 percent in the same period.
58.com’s institutional dominance in mobile use is becoming clear. QuestMobile’s Q2 report found that another 58.com-connected platform, Doumi (斗米), had seen a year-over-year rise in MAU of 683 percent in Q2 (which we reported on here).
Guazi CEO Yang Haochong said Guazi is developing a “Guazi 2.0”, redesigned mobile platform.
Guazi’s network now covers 200 cities in China, across 30 provinces. Earlier this month Guazi secured $400 million U.S. in an eagerly anticipated Series B financing round. The round was led by a $100 million U.S. investment from former Series A backer, Sequoia Capital China (which we reported on here).