Online services face obstacles in gaining widespread acceptance

It has been four years since Mercedes-Benz began selling Smart cars on Tmall.com. Geely and other manufacturers like Geely have also opened online shops during that time. Last November a new milestone was achieve as leading Chinese dealership network Pangda Group opened an online shopping service.

However, Pangda Group Marketing Manager Li Hongbo commented on the difficulty of running an online store for automobiles. He emphasizes that purchasing automobiles rely on user experience, which makes selling them exclusively online very hard. However, Mr. Li believes that the prospects for online stores selling automobiles is bright.

Analysts point out that online services have been successful in gathering customers, but haven't been successful in completely imitating other online shops, where buyers order their goods online and have them delivered to their door.

Rising running costs and decreasing product margins have made many manufacturers look into the possibility of using online services to replace 4S dealerships. Luo Zhukong, Dongfeng Liuzhou Fengxing's director of the Beijing region, is optimistic in the future of online services.

Other analysts are a little bit more reserved. When asked whether or not Tesla's O2O model will replace traditional automobile dealerships, an analyst in the IT industry remarked that the market for automobiles is not nearly as mature as those for consumer electronics and mobile phones, which will make it difficult for such a change to take place. The analyst added that dealerships are very stubborn and will make it even more difficult for online sales to gain momentum.