Amid the pandemic and its impact on Thailand’s automotive industry, i-dac Bangkok’s Suchada Supakan explores the e-commerce opportunities for auto brands and charts the future of marketing for automotive commerce in the kingdom.
COVID-19 has disrupted Thailand’s automotive sector with the economic downturn and extended lockdown affecting showroom sales. Auto brands are facing a tough time improving sales, which fell 21% at the end of 2020.
While it may be challenging to sell a high-involvement product such as a car online, there is an urgent need for the automotive sector to adjust its marketing strategies in order to survive the pandemic economy.
This edition of i-dac Digital Flash explores the e-commerce opportunities for automotive brands and charts the future of marketing for automotive commerce in Thailand. Let's look at how automotive brands can get into the driver's seat to gear up their businesses for e-commerce.
“Obviously, buying a car is not an easy decision, where most customers take multiple steps such as going to the showroom and test driving the car,” said i-dac general manager Kyosuke Matsui. “However, during the COVID stay-home period, we saw some interesting challenges from the automotive brands exploring and building showroom/shopping experiences online.”
Matsui added that i-dac has researched Thai consumers' feelings about buying a car online.
“As today's customers start their research online, it is clear that a robust digital strategy is key for marketing success. We all may need to be prepared to extend this strategy to the lower funnel as seen from the global trend and Thai cases.”
Pandemic impact on auto segment
The Thai automotive sector has seen a significant decline in sales value over the past one-and-a-half years. In 2019, one million cars were sold. But this dropped 21% to about 792,000 cars in 2020 and in the first quarter of 2021, sales of about 194,000 units were reported.
As showroom sales declined, major automotive players began shifting more marketing activities and consumer services online. Some examples include:
Mitsubishi’s M Drive application
Through its M Drive app, Mitsubishi provides at-home services to its customers, ranging from a virtual showroom, online car reservations, instant finance application approval and even after-sales services.
Mazda’s Sky Booking closes the deal online
Mazda launched www.skybooking.mazda.co.th for its new and special edition models. This virtual showroom allows customers to buy a car online – from selecting the model, colour, financing scheme and nearest showroom, to the final step of confirming a car reservation. The success of Sky Booking can be witnessed from the over 2,000 bookings for the Mazda CX-30 during its launch period.
Ford moves closer to customers
In response to the public's aversion to crowded showrooms, Ford used Facebook Live to stay connected with potential car buyers. The brand created several live Ford Motor Shows and a live Showroom on Demand series for viewers to have the cars delivered to their homes for viewing and test drives.
Volvo’s full-funnel approach
To generate awareness, engage with consumers and drive online car bookings, Volvo used multiple digital channels that include its website, Facebook, Instagram, YouTube, Line Official Account and Line My Shop. Through its active engagement and sales drive, Volvo's official Line Account and Line My Shop have 432,043 friends as of Oct 12, 2021.
Buy a BMW in 3 steps
BMW fans are now able to pre-book and shop online on the BMW website in three simple steps by selecting a model, the nearest dealer and paying online.
Automotive e-commerce around the world
Automotive e-commerce is not new in other markets. In China, for example, Taobao leads the way, with the Alibaba e-commerce platform generating US$7.5 billion in the first half hour of a live event where autos appeared in the top six categories for total transaction value during the campaign (McKinsey & Company, 2021).
In Singapore, Volkswagen’s interactive portal allows consumers to take a virtual tour and live chat to arrange for a test drive at their preferred location. The German brand has also expanded its presence on e-commerce marketplaces by selling its cars and spare parts on Lazada and Shopee.
Thai consumers and buying cars online
It’s time for automotive brands to bring new retail and digital media experiences closer to their consumers. The automotive sales model has shifted from its physical model to a broader experience, towards omnichannel services across a wide range of automotive brands from mainstream to luxury. One single digital platform can now drive car sales from the upper to lower marketing funnel.
With Thailand’s automotive e-commerce still in its early stage, an i-dac online survey in September 2021 revealed that:
- A quarter (28 out of 121) are inclined to buy a car online.
- Attractive online deals and credibility are important.
- Official online sales channels are
- Physical and reliable experiences are necessary.
But some consumers still hesitate to buy a car online. The top five reasons are:
- Prefer to physically check the interior and exterior design.
- Prefer to do a test drive at the showroom
- Prefer to negotiate in-person for a better discount.
- Fear of making an online transaction to buy a car.
- Distrust VR or AR technology as it makes the car look unreal.
What it means for brands
To deliver a seamless experience through omnichannel services, auto brands have to make themselves digitally attractive and credible to support their automotive e-commerce.
Looking at the profiles and perceptions of car consumers over the past 18 months, the potential target group can be described as follow:
- They generally prefer to shop online during the past 1.5 years (63% prefer to shop online and 37% prefer shopping in-store)
- Potential “online purchase preferred” car buyers are sophisticated urbanites and online shopping-savvy Gen Z (25.4%), Gen Y (38%), Gen X (32.6%) with middle to upper-class income.
- They are city dwellers, with 71% being science, tech and nature enthusiasts; 70% popular culture and leisure enthusiasts; 67% home and lifestyle enthusiasts; and 66% health, fitness and beauty enthusiasts.
With automotive brands making a strong push to digitise automotive commerce and provide consumers with a broader automotive retail and media experience, the auto segment in Thailand is in the midst of an omnichannel retail transformation.
Brands have to grab potential target consumers at the early stage of automotive e-commerce because prioritising them is essential as few are willing to buy a car online yet.
How to prepare for redefined automotive commerce
Brands need to discover which consumers can adjust better to buying a car online and knowing which target segments will go for which car models is a good start for the digitisation of their automotive business.
Identify the more open-minded and online shopping-savvy Gen Z, Y and X city dwellers who are comfortable buying high-value products online. As long as a brand can make them trust its automotive e-commerce, it will not be difficult for them to purchase a car online or make a paid reservation. Other points to note are:
- Get your brand ready to provide a seamless experience to consumers throughout the marketing funnel.
- Put your omnichannel and e-commerce services on the car buyer's radar and get instant purchase decisions with the best deal offer.
- Deliver bespoke and customised digital consultation to convince customers who interact on your website, mobile app, social media channel or e-commerce marketplace.
- Having brand and dealership credibility will make your customers feel comfortable buying online without visiting a showroom.
- From choosing the car model to signing up for financing, a simplified and thorough, yet reliable, e-commerce experience is a must.
- Centralise your automotive e-commerce ecosystem throughout online and offline sales, whilst tailoring to the needs of your customers and dealers.
- Digitise your dealership and integrate CRM data to generate qualified leads at scale.
- Utilise unified data to keep improving CRM and acquire new prospects with a full-funnel marketing approach.
This article is part of an ongoing series with i-dac Bangkok based on their monthly i-dac Digital Flash series, featuring insights into trends in Thailand.
The series is led by the Digital Strategic Planning unit:
- Suchada Supakan, Head of Digital Strategic Planning
- Natthaporn Loetsakulcharoen, Senior Manager of Digital Strategic Planning
- Laddawan Thanlap, Senior Digital Strategic Planner
i-dac Bangkok is a digital agency specialising in performance media, branded content, and data marketing.