Didi Chuxing will invest 200 million U.S. dollars in Beijing-based used car e-commerce platform Renrenche, the latter announced on Monday, which marks the start of Triwizard Tournament between Renrenche and its rivals Youxin and Guazi.
"Didi will bring Renrenche over 400 million users and more than 17 million drivers, which is the largest and the most accurate target market in China for a car trading platform. Renrenche will gain huge resources from this round of investment to compete in the used car market," said Li Jian, founder and CEO of Renrenche.
"Apart from capital support, Didi will cooperate with Renrenche with developing products, technology, operation and business planning…to speed up the deployment of automobile finance and after-sales service. In the future, Renrenche will connect with the Didi app where Didi users will expect to directly enjoy quality car trading service," Li added.
Founded in 2014, Renrenche is the first used car trading platform in China. It conducts business in over 80 cities nationwide, and trades nearly 100,000 vehicles. It has capital support from Tencent, Shunwei Capital, and Ce Yuan Ventures in previous rounds of investment.
China's used car market has gained good momentum in recent years, as data from China Automobile Dealers Association shows about 10.4 million used cars were traded in 2016, an increase 10.33 percent from the previous year. The data also estimates trading volume of used cars will surpass 12.5 million vehicles in 2017, with growth rate up to 20 percent year-on-year.
However, only 10 percent of the trading volume of used cars in 2016 came from e-commerce, revealing huge potential in the used car e-commerce industry.
This January, Youxin received joint investment worth 500 million US dollars mainly from TPG, Jeneration Capital, and China Vision Capital. Other investors included Warburg Pincus, Tiger Global Management, Hillhouse Capital and KKR.
This June, Guazi got B-round investment of over 400 million US dollars from H Capital, West Fund, Dragoneer Investment Group, etc. It gained additional investment from Sequoia Capital, Matrix Partners, BlueRun Ventures, and Hike Capital.
The 200 million US dollar investment in Renrenche marks an even fiercer rivalry among Renrenche, Youxin, and Guazi in China's used car e-commerce industry.
With regard to market influence of the three rivals, data from We Media Dongdong Note reveal that between late April and late May, Youxin ranked first in Baidu's search index, while Guazi topped the list in WeChat's index. In terms of brand awareness, Renrenche came in third.