SUMMARY
Hyundai, Tata Motors, Honda, and Mahindra recently launched their online portal for car sales
Multi-brand dealerships believe that OEMs would end up taking over a chunk of their business with the digital initiatives
With the digital portal, dealerships want to limit their dependence on OEMs for car sale
To drive sales, which was nil last month, automakers like Hyundai, Tata Motors, Honda and Mahindra have separately ventured into the digital space by launching their own websites for new bookings and orders.
Shashank Srivastava, ED, marketing and sales at Maruti Suzuki, told Economic Times that the original equipment manufacturers (OEM) platform incorporates dealer platforms, which in most cases are not exclusive.
Explaining the offline sales dynamics between automobile makers and dealerships, Srivastava elaborated that OEMs normally operate at the top of the buying funnel, managing awareness and brand exposure, whereas the deals are the bottom of the funnel, looking after enquiries and conversions.
However, car dealerships believe that with OEMs directly coming into the online space the companies are trying to change the dynamics of the funnel. Multi-brand dealerships believe that automakers would want to own everything related to the digital desk — social media, website, recruitment, propose incentive schemes, control increment and customer data — which would give brick-and-mortar dealerships less chances to build their own independent business and manage customer relations.
Therefore, several individual car dealerships, which deal with multi-brands, are planning to launch their own separate portal in order to create specific data and use it to do cross-sales and reduce their dependence on automobile makers.
Vinkesh Gulati, vice president of dealer body at Federation of Automobile Dealers Associations (FADA) said, “OEMs are not confident that all the dealers are capable of managing on their own. Both the digital models [of OEMs and dealers] would surely overlap, but we see a spurt in dealers setting up their own digital platforms. Going forward, dealers will spend on tie-ups with search engines to get potential customer leads.”
All Brick-And-Mortar In Rebellion?
This month, several brick-and-mortar entities, whether its local retailers or restaurants, have risen up against big players in their domain. For instance, the Confederation of All India Traders (CAIT) unveiled bharatemarket, its own ecommerce portal, which will be launched next month. With this, the association aims to provide a digital platform to all local retailers, who have been facing challenges due to the tactics of ecommerce portals like Amazon and Flipkart.
Meanwhile, the National Restaurant Association of India (NRAI) have decided to take on Zomato and Swiggy by launching their own food aggregator platform. Both NRAI and CAIT have decided to start such ventures to limit their segment’s reliance on third-party private players, who have been following alleged unfair practices to run their business.
Notably, both the organisations have run aggressive campaigns against ecommerce and food delivery giants last year, forcing them to change their business model and policies. However, with limited results, the duo decided to take such steps.
