How Flipkart and Amazon Are Shaking Up the Automobile Dealership Industry

Does opening the Amazon app to buy a car seem like a far-fetched reality? Not anymore, e-commerce giants like Amazon and Flipkart have stepped up to transform this industry.

This move will shake the automobile dealership industry. There is a chance that offline automobile sellers will lose out on some customers. On the contrary, users might be sceptical and not ready to buy their cars online.

This blog discusses the e-commerce giant's entry into the car dealership industry. It will discover potential challenges for brick-and-mortar businesses and user advantages.

How Flipkart and Amazon are Challenging Offline Car Sales?

Flipkart recognised the scope of a two-wheeler audience in India. It launched its automotive category by selling two-wheelers online. In the meantime, Amazon ran pilot studies to sell cars on their website.

At the start of 2024, Amazon and Hyundai announced to launch their e-commerce automobile category by the end of the year. They have built the customer base by launching various Amazon wings like digital showrooms for car specs, expert comparisons, and selling automobile accessories.

Amazon provides the option of self-pickup or doorstep delivery of automobiles. Offline dealers are still the last point of contact for buyers. They can check out the car and complete payment post-delivery. It further added to the user’s convenience.

Automobile e-Commerce Growth in India

Let us understand the context of automobile e-commerce growth.

• Taking Car Sales Online

Global automation e-commerce is expected to increase from USD 38.67 billion in 2021 to USD 176.24 billion in 2031. New-age consumers see great potential in online automobile sales. Here are some of the major benefits of taking car sales online:

• More options

Users get various options from the same brand in an automobile showroom. But automobile e-commerce spaces provide them with a variety of brands. This gave online automobile retailers the upper hand over offline sellers.

• Simulated experiences

Users resisted buying vehicles online as no ‘test-drive’ facilities existed earlier. Online retailers came up with a solution to that. They developed simulation experiences of the same.

• Right placements

Automobile e-commerce has access to buyer information. It includes browsing history, buying patterns, click rates, and online interactions. Online sellers use it to enhance the buying experience.

Sellers can lead their buyers like Amazon did with launching car sales-associated applications. They started selling parts and accessories for automobiles.

This kept the buying enthusiasts in the loop. Next, they launched Amazon vehicles, which provided reviews and analysis of car qualities. It gave all automobile information but did not sell cars.

Impact of Online Automobile Sales on Traditional Dealers

Here is an overview on the impact of online automobile sales on traditional dealers, Impact on Brick-and-Mortar Dealerships.

• Amazon car sales

Online automobile sales are a seismic wave in the vehicle landscape powered by technology. For decades, the industry relied on the traditional ‘go to market’ model of car dealerships. The original equipment manufacturers are now moving online to cater to user requirements.

Many users have grown tech-savvy and therefore want convenience in the form of online services. The traditional automobile sales model has several challenges and the push to go end-to-end digital.

• Losing on competition

There is an increased competition among online car sellers to win consumer attention. New entrants in the industry are also trying to establish their audience. They are doing this by threatening brick-and-mortar businesses' distribution and sales channels.

On the flip side, these traditional businesses are adapting to recent technologies and tech innovations slowly. Therefore, they are lying behind and losing customers.

• Large Inventory

Inventory is a significant issue with traditional car dealerships. They endure large expenses to maintain these showrooms, and in addition to that, they cannot house large stocks on display because of space limitations.

However, online automotive sellers do not have such liabilities. After placing the order in their online catalogue, they contact the dealers. Either they are delivered to the customers' doorstep from the dealers, or the customers pick them up.

• High stress for consumers

Consumers can sometimes relate offline dealerships with stress. It is because of the high staff turnover trends in these dealerships. New member interaction during every visit causes users to stress. Also, consumers relate unnecessary costs to offline automotive showrooms.

Online retailers like Flipkart Automobile do not have such complex steps. They are transparent about the cost breakdown and provide details of associated dealers on their websites.

How Buyers Benefit from Automotive e-Commerce?

A Win-Win for Customers. Users are still resistant to buy from online-only automobile sales. Despite increasing online car sales during the pandemic, it has fallen drastically in 2022.

Only 4.2% of buyers planned to buy cars without physical evidence in the same year. Let us discuss the overall impact on future car buyers:

• Well-informed audiences

Offline dealerships have claimed that buyers previously visited multiple showrooms to decide on a model. Now, they are much more informed about cars with the help of digital automotive selling services.

• Increased preference for online car buying

More users are turning towards online automotive dealers like Amazon car sales. According to a McKinsey survey, 29% of consumers want to buy their following cars online. 23% of consumers state they feel ready to purchase vehicles online but might need physical touchpoints.

• Omnichannel sales reshape buying trends

Slow and steady introduction of the omnichannel car sales concept is conditioning the buyers. They have more options and can lead the trends in automotive sales. Buyer demands are creating urgency among offline dealers.

• Offline Dealers go digital

Offline dealers are expected to skill up and establish their presence on digital channels. This ensures better user relationships and promises customer loyalty.

Despite the dilemma of buying offline vs. online, consumers are on the gaining side. They receive ample sources for understanding the automobile specs and making better decisions.

Final Thoughts

Amazon automobile sales are the right step at the right time. They are opening online car sales when the buyers are most ready. However, these online car sellers must create physical touchpoints to influence conversions.

Flipkart Automotive should add these physical touchpoints too to improve sales in their existing two-wheeler wing. They can use strategies for a better digital presence. It will influence the users to make the decisions and can prove to be an organic push towards more sales.

Whether you are just entering the online automotive market or an offline dealer planning to expand their business, connect with GrowthJockey to strategise and improve your digital content. Our expert team specialises in delivering tailored solutions to unlock the full potential of your business.

FAQs

1. How do I get the car's feel before buying it online?

If you are big on the car's feel, there is no better option than going to a retail showroom and test-driving the vehicle. However, many online car sellers are bringing technology to feel the car. For example, CarDekho has created a virtual 360-degree tour of the vehicle. This virtual presentation also shows the features of the car.

2. How can offline dealerships change to remain sustainable with more online automobile retailers?

Offline dealers have been focusing on operational excellence until now. With the shifts in automobile sales, they need to be more agile. Brands can build multibranded showrooms to compete with e-commerce catalogues. Showrooms must establish their in-store consumer experience as quickly as possible. This is to ensure that they do not lose their consumers.

3. What should I check when buying online cars?

There is no significant difference in the car buying checklist here. You must follow the basic steps which you followed for buying from offline dealers. You should check the manufacturing date, colour, paint, interior, aircon, and equipment. However, in the case of online automotive dealers, you can go through user-generated content like critics and reviews.