WeChat Luxury Car Crowdfunding Goes Viral In China

The Chinese-language version of the DS book, which promotes an upscale image for the premium auto brand. (DS) Good bargains and promotions are mandatory in China’s e-commerce market, and flash sales and group buying (tuangou wang) are strong incentives to buy online. Convenience is also a key driver: with a varied number of payment methods, including those through social and mobile apps like Weibo or WeChat, one can buy any kind of product–even a car. The automotive industry experiences virtual commerce in China like nowhere else in the world. Back in 2010, Mercedes-Benz sold 205 Smart models in about 3.5 hours on Taobao. In May 2011, Lamborghini chose to exhibit several models on Tmall to offer netizens the ultimate thrill to shop (they could book, but there were no transactions online). Mercedes-Benz renewed the experience in February 2012 on Jingdong (JD): 300 Smart cars were sold in 89 minutes (17,000 new users added the model to their watch list). They did it again in January 2013, this time on Weibo, selling 666 units within nine hours. This year in June, Glamour Sales highlighted for the first time a Maserati Gran Cabrio Fendi limited-edition model. A Lamborghini available on Tmall. (Tmall) Mobile payment is revolutionizing the way Chinese consumers shop China remains a cash-based economy, but digital wallet adoption is growing in part due to the burgeoning e-commerce market, explosive growth of smartphone penetration, and mobile payment technologies. Earlier this year, Tencent “socialized, digitized and gamified the tradition of giving red envelopes (hongbao, or money as a gift) in celebration of Chinese New Year" on WeChat, according to Forbes. Digital finance is indeed “disrupting” China’s economy, impacting Chinese consumption behaviors while offering an ever more diverse range of opportunities to enrich the way brands can connect, engage, and sell with/to people. In this regard, crowdfunding has been a hot topic these past months, with Alibaba promoting its “YuLeBao” service offering Chinese people to invest in popular films (spending from RMB100 [US$16.13] to RMB1,000 [US$161.30]). As a result, in five days, 223,800 investors bought 785,500 shares in Chinese movie projects. Just last week, its main competitor JD (of which Tencent owns 15 percent), launched its own crowdfunding platform Feniziqian (investment is from RMB100 up to RMB2,000 [US$320] for a selection of movies). Now, for the first time, the automotive industry leverages crowdfunding with Sino-French carmaker DS, an automaker which recently separated from Peugeot Citroën. The company just launched its own "DS OrdersBao" platform for its DS models. DS innovates to target China’s young modern business elite Since its official launch in China in September 2012, the brand first sold the imported DS3, DS4, and DS5, and later added the locally produced DS5 in September 2013. It has now been selling the DS 5LS since March 2014, which is manufactured and distributed by CAPSA (Changan PSA Automobiles Co. Ltd, which has a joint venture with Peugeot Citroën). They are sold through 56 DS stores across China in Tiers 1, 2, and 3. One hundred are planned by the end of 2014, when they will expand into Tier 4 cities. For General Manager DS China Arnaud Ribault, whom I met at the DS World Store in Shanghai earlier in May, "DS targets Chinese young modern business elite with an international culture, in search of a unique and very contemporary French luxury experience. Our objective was to drive DS 5LS online sales in a new and breakthrough way, while illustrating DS brand values: progressive, distinctive, and audacious. Our strategy has been to leverage WeChat social commerce platform as the key driver for conversation and sales. The idea was to create the first automotive crowdfunded campaign.” The DS Store WeChat account was opened on January 11, at 11:11 a.m. (The 11:11 time refers to the annual Singles’ Day shopping extravaganza). WeChat DS Store now has 30,000 followers. The DS WeChat account. (DS) Built in three phases, the campaign offered several participation layers, engaging the audience during a six-month period from January to June 30. During this time, it leveraged three new limited-time e-commerce deals to incentivize purchase: 1. From March 28 to June 11, users could pay 1 yuan and benefit from a DS 5LS "luxurious feast": 100,000 kilometers of free maintenance for three years. 2. From March 19 to June 30, participants could take part in a DS OrdersBao campaign: pay a deposit of RMB5,000 and get 11.11 yuan per day until the car is delivered (which can take up to a maximum of 45 days). 3. From March 28 to June 30, the company launched a three-month DS 5LS campaign called “1 Yuan Premium DS Crowdfunding,” which works in the following way: first, a mobile internet circle sales mode is created. Next, fundraisers send link to friends (supporters) and invite them to collect funding for purchasing a car. For each friend who pays 1 yuan, DS will pay 100 yuan (with a maximum of 10,000RMB) to the car buyer. As a result, a total of 2,500 DS 5LS were sold across China in three months. The crowdfunding campaign united, as of June 30, 15,850 fundraisers and 250,000 supporters. Additional fundraisers per day during the period went from 140 with peaks at 340 end of June, for a current average of 250 a day. This growth, along with the 2,500 cars sold, convinced the brand to extend the operation the whole summer through July and August. In addition, more than 20 “One Hundred People Parties”—where fundraisers, supporters, prospects were invited for an evening mixing car demonstrations, cocktails, and games—were organized in car dealerships across China. The objective is to have 40 in July and August. According to Ribault, “These good results encourage us to work on communities in a soft way. For the 5LS campaign in Shanghai, we used door-to-door and a fleet of 20 cars to promote test drives from home to the office. Eight hundred people have been registering since May 29. We will replicate the campaign in four more cities soon.” An image from the online Chinese DS Club. (DS) The brand celebrated its second anniversary in China by launching its DS Club (gathering its clients, the best salespeople , as well as any fans of the brand) and releasing the Chinese version of its book. WeChat offers China’s savvy mobile users the opportunity to engage directly with DS to find product information, contact the salesforce, and, particularly in this case, open a new era in terms of shopping experience in the automotive industry. These marketing efforts showed that tradition, heritage, and innovation are what DS is about. In its latest (June 2014) report “Luxury Cars & Goods: Luxury to the People,” Exane BNP Paribas said it is “very optimistic about PSA’s potential in China, which we expect will come from the localized production of the DS premium brand.” Laure de Carayon is the founder and organizer of China Connect, the largest gathering of experts on Chinese consumer trends, marketing, digital and mobile in Europe. China Connect was a supporting partner of GMIC 2014. Follow her on Twitter at @laure2carayon, and receive updates from ChinaConnect at @ChinaConnectEU.

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WeChat Luxury Car Crowdfunding Goes Viral In China