Automotive World: The automotive retail revolution arrives in India

Share This Page

A new initiative for India takes word of mouth online and to the masses. Could this be a blueprint for a new emerging market online car sales tool? By Megan Lampinen

Read the full article online here.

The car purchasing experience is moving online, and as it does, the automotive retail revolution is moving into emerging markets.

In India, Internet usage has reached such a point in the market that J.D. Power, a marketing information services firm, and Wheelmonk.com, an Indian website for car owner feedback, have decided the time is ripe to introduce a new information service. The result: an automotive website offering feedback from verified vehicle owners.

The power of opinion

Studies from J.D. Power indicate that feedback from friends and relatives plays a key role in new car purchase decisions among Indian consumers. In fact, 84% of new-car owners in India stated that they rely on word-of-mouth recommendation when shopping for their car.

“Even with the proliferation of the Internet in India, word-of-mouth recommendations remain solidly the top information source in the car buying process,” Mohit Arora, Executive Director at J.D. Power Asia Pacific, told Megatrends. “And it has remained in pole position for the past 15 years, since J.D. Power started its tracking studies in India.”

After friends and relatives, the next most popular information source in the car buying process is newspapers and magazines (adverts and articles), a distant second at 39%.

Moving online

“However, having said that, it doesn’t mean that automakers should discount the online influence,” Arora added. The percentage of car owners that use the Internet in the car buying process has risen from 22% in 2010 to 28% as of 2015 and is further accentuated in cities. “The importance of online research in the car shopping process will only increase in future,” he predicted.

Of those car buyers in India who are using the Internet, J.D. Power figures show that 45% are visiting manufacturer websites, 44% visited dedicated car websites/forums, 41% visited the automotive section of a consumer/news website while just 17% visited dealer websites. As for how they are using the Internet, the accompanying table shows the kind of information sought out by customers online.

“In the coming years, with improving infrastructure, increasing awareness and growing confidence of consumers to interact online, we are likely to see a greater role for the Internet in the overall lifecycle ownership of the car,” commented Arora. He suggests that activities like scheduling a service visit or ordering DIY kits and accessories will increasingly be performed online.

Top 5 information sources*

%

Friends / relatives

84%

Newspapers / magazines (ads / articles)

39%

TV

32%

Internet

28%

Dealer owner / Salesperson recommendation

25%

*Multiple response question, totals may exceed 100%
Source: J.D. Power 2015 India Sales Satisfaction Index (SSI) Study

Expanding the circle

Wheelmonk and J.D. Power are tapping into these two big trends of online research and word of mouth recommendations. While owner feedback plays a critical role in car purchase decisions, most individuals only have exposure to a handful of friends and family members. “If you look around, an individual buyer manages to get only limited feedback within his or her own social circle,” Sameer Dua, Co-Founder of Wheelmonk.com, told Megatrends. “Most of the websites that are currently out there do not have any significant ownership-related information to help consumers make a better choice. They end up being just a car listing or expert review websites.”

This is exactly the gap that Wheelmonk and J.D. Power want to fill. Their focus is twofold: to create easy access to comprehensive verified consumer feedback data for potential car buyers, and to recommend what best suits the individual buyer.

“We believe that expert reviews, while being honest and informative, don’t work the same way for everyone,” added Dua. “Different buyers have different sets of preferences and it is difficult for a prospective buyer to make a choice among the plethora of options available based on these reviews alone. So wheelmonk.com has developed a proprietary algorithm based on these thousands of pieces of customer feedback and in-house expert ratings, that helps these buyers identify the cars that best suit their needs.”

Just the start

As Dua explained it, the current version is “just a discovery platform”, but he added that the team has started working on expansion plans. Specifically, they are looking to create a platform which connects buyers to dealers. “The platform will not only drive seamless integration within the ecosystem, but would also provide multiple tools to dealers to improve their connectivity with consumers. It would also improve its internal supply chain efficiency and operations effectiveness,” he explained. The new modules are currently in the development stage but should soon become available on the site, he promised.

Asked about the possibility of buying a vehicle online, and whether exists the potential to take the website down this road in the future, Arora said, “At this point of time, many of the people are using the Internet for initial information searches. However, most of these customers would still walk into the dealerships to view the product or schedule a test drive before committing to the purchase. Nearly all of them would talk to a friend or relative, or to an owner of the same model to get their perspective on the vehicle’s performance and its suitability for their needs.” While Arora believes that Internet use will expand in the years ahead, he added: “It may still be too premature to see significant online purchasing in the automotive industry in the short to medium term.”

Key information gathered via Internet*

%

Technical specifications

78%

Vehicle features or accessories

73%

Vehicle price

61%

Vehicle brochures / pictures

55%

Warranty information

29%

Spare parts information

23%

Service maintenance information

21%

*Multiple response question, totals may exceed 100%
Source: J.D. Power 2015 India Sales Satisfaction Index (SSI) Study

A model for export?

The proposition offered by Wheelmonk.com may be new to India but it has already been available in other markets for some time. In the US, the J.D. Power Consumer Centre provides information from the agency’s studies to consumers. In China, J.D. Power collaborates with multiple automotive portals to provide the same sort of information.

“It is now launched in India as we find an increasing proportion of customers utilising the Internet during the vehicle shopping process,” Arora explained. “Moreover, this is a critical time for us to launch this initiative as there is a great need in that market for prospective buyers to access independent, third party information supported by large consumer bases and covering the entire spectrum of car ownership.”

In India, the need for help such as the new website will offer is all the more pronounced in light of the number of new buyers. As Arora added: “We want to provide guidance to prospective buyers who are making one of the largest purchases in their lifetime and this is even more critical keeping in mind that nearly half of them are first-time car buyers.”

Transparency and advice will help put them at ease. “Transparency is largely driven through proactive communication, fulfilment of commitments and proper documentation. Over the years, dealerships have made progress in several of these areas. However, with increasing Internet usage, customer expectations and knowledge are advancing much faster than the dealerships,” he said. Wheelmonk.com is here to help.