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Reporter: At present, Dongfang Auto Parts City is working hard to build an international auto parts brand exhibition and sales center. This is also seen as an important transformation of Dongfang Auto Parts City. How do you see this? Please tell us about the situation.
Chen Hai: At present, Dongfang Auto Parts City is focusing on building an international auto parts brand exhibition and sales center. The core of this project is to help companies do business, build channels, shape brands, reduce operating costs, and leverage on Oriental Auto Parts City's 15 years in the post-market. Advantageous resources, to create a well-known brand after the market.
The exhibition center has a total of four floors, one and two of which are the parts and components of the automobile series. Customers settled in the form of shops. There are a large number of merchants entering the market and it is difficult to find a shop; the third and fourth floors are the product exhibition halls of production companies. The large auto parts system covers 70% of the aftermarket auto models and builds high-quality smoke-free factories.
The exhibition center will coordinate with the 500 auto parts manufacturers in the United Nations to connect with upstream buyers at home and abroad and downstream repair shops (reducing the cost of upstream and downstream industries), and conduct unified promotion and promotion.
The establishment of this exhibition center is an important transformation of Dongfang Auto Parts City. In the future, we will no longer be a simple property manager, but will serve as a service provider for the industrial chain. The profit model will also undergo major changes. In the future, this exhibition center will be built into an international service organization integrating brand display, product exhibition, complete variety, after-sale protection and internal and external trade.
Reporter: You mentioned that Oriental Autos has partnered with the city to build this exhibition center in order to strive to become a service provider of the industrial chain. Compared to the previous business model of Auto Parts City, it is necessary to successfully transform from a property manager to an industrial chain service provider. ?
Chen Hai: The traditional auto city business model is to only rent houses and shops, and after the completion of this exhibition center, it will provide professional display platforms, all-round promotion platforms, and innovative transaction service platforms for all major enterprises. Public information consultation platform.
Our exhibition center mainly builds a comprehensive trading service platform for major manufacturers of auto parts aftermarket.
Specifically, we will launch physical exhibition halls and online exhibition halls in product display. Physical exhibition halls and brand products will be displayed in the form of exhibitions, exhibitions, exhibitions, unified design specifications, and uniform decoration standards. The network exhibition hall will provide personalized design (thematic investment topics, product display topics, and corporate brand topics), highlighting the strength of the company. Display corporate image.
Secondly, in terms of product promotion, we will form a supplier alliance to mediate alliances such as authoritative magazines, newspapers, radio stations, television channels, and well-known websites in the industry to form a strong media promotion system. At the same time, we will work with governments, business associations, and Domestic and foreign exhibitions, domestic and international purchasing groups are connected to help companies reduce operating costs; in addition, regular activities such as procurement matchmaking meetings, buyer meetings and ordering meetings are organized to help companies obtain purchase orders.
In addition, we will also provide services such as financial settlement, inventory pledge, collection order procurement, public warehousing, logistics distribution, and product traceability to the settled companies to help companies reduce operating costs, increase operational efficiency, increase market share, and establish new models for auto parts trading services. .
Finally, we will build a member information database of manufacturers, distributors, and buyers through service functions such as e-commerce and supplier alliances to further improve the industry price information database and form a full-model, multi-category price information collection system; The market product code database, which regularly publishes product price index information, aims to become the industry-oriented standard. Through cooperation with related organizations, we provide information consultation on parts and components industry chain including talent information, law, and trade.
Reporter: As you said, the exhibition center will be built into a trading service platform, and the profit model will also change. Where are our profit points in the future? At present, what is the approximate cost of each shop's exhibition shop and what are the settled manufacturers?
Chen Hai: The warehousing and logistics services we provide for manufacturers are our profit points. How many shops can be sold is not what we care about. This is also an important expression of our business model that differs from the traditional auto parts city.
Now a shop is roughly 30,600 booths a year. In addition, this exhibition pamphlet also includes professional hosting services that we provide to customers. In other words, the exhibition center will select outstanding business representatives and conduct strict business process and product and technical training. After qualifying, the business representative will conduct product display, business contact, exhibition promotion and sales on behalf of the merchant's market development plan. With a series of business activities such as signing a contract, businesses do not need to send additional personnel.
The exhibition center has already attracted international famous brands such as Denso, NGK, KYB, Ego, Delphi, Gates, Huirun, Valeo, KLG, Dezhong, ZAFS, SANYCO, Opeta, etc., and Wanxiang and West Lake. Golden Kirin, Xinyi, Huirun, Changhui, Luo Shi, Renben, Shuanghua, Bond and other domestic first-line brands settled in, adding more than 500 companies. We will continue to attract foreign investment. After the formal opening of this year's December 20, we believe there will be more companies.
Gasgoo.com: What are our plans for the future?
Chen Hai: We plan to settle in 3,500 enterprises, display 10,000 companies throughout the year, and develop 100,000 member companies online and offline. The annual transaction volume will exceed 50 billion yuan, creating more than 10,000 direct jobs.
Reporter: The exhibition center proposed that it will help companies reduce counterfeiting risks, reduce procurement costs, and reduce capital occupation. How these services are implemented, please explain specifically for us?
Chen Hai: This is our collection of procurement services.
First of all, Dongfang Auto Parts City has been established for so many years and has concentrated a large number of outstanding auto parts dealers. In this group of people, there is a huge demand for procurement. We are now trying to centralize these procurement requirements and then to manufacturers or manufacturers. The first-level agents get goods directly. In this way, on the one hand, because many intermediate procurement links are eliminated, the ex-factory price or the lowest purchase price can be obtained directly, which will greatly reduce the procurement cost.
In addition to the purchased products, we will stick all the uniform bar codes and send them to the dealers who need them. These bar codes all have retrospective functions, which can effectively prevent the production of fake and shoddy products.
Finally, we provide the supply chain financial services. The first is the stock pledge. In the process of production and sales, suppliers often face the situation of increasing storage pressures and sluggish flow of funds. Union Bank of the Exhibition Center pledges stocks of products for settled enterprises as pledges. After the assessment reaches the standards, it is guaranteed by the exhibition center company. Enable customers to successfully finance and free up suppliers from the pressure of inventory.
Then there is financing. Downstream customers sign orders with the exhibition center, and the exhibition center opens bank acceptances to the manufacturers through bank credits. The exhibition center and downstream customers use short-term fixed-account settlement. These service projects will greatly reduce the financial pressure on companies and reduce the use of funds.
Reporter: What do you think about the current development status of the domestic aftermarket?
Chen Hai: First of all, China’s car ownership is still very low, and domestic automobile consumption still has a lot of room for growth. Second, in the aftermarket area, there is a huge business opportunity. In 2008 and 2009, China entered the explosion period of automobile growth, and the resulting consumption of the aftermarket is generally delayed by another five to six years before it can be shown, and the profit generated by the sale is often More than six times the profit of new car sales. Therefore, I am very optimistic about the future aftermarket.
However, due to the incomplete after-sales market in China, there are many chaos in it, such as the fakes mentioned earlier. Often in the country, products produced by a single manufacturer sometimes reach as many as dozens of agents in the same area, and dealers get goods from manufacturers because there are no strict regulatory measures in order to pursue higher Profit, sometimes it is inevitable that it will be doped with fakes. And we adopt unified bar code measures on products and collect single purchases to a great extent to eliminate the circulation of fake and shoddy products in the market.
Reporter: According to the understanding of the exhibition center's distribution platform for connecting with international buyers and building in Europe and the United States, the project of Phoenix City of the United States has been fully launched. In the establishment of export business platform for enterprises, the exhibition center is how to do it?
Chen Hai: At present, we have established logistics display platforms in North America, Europe, South America, Russia, Southeast Asia, and other regions. By linking up with local specialized distribution agencies, we are able to serve our business globally. While the parts and components distribution platform being invested and developed in the United States covers an area of ​​nearly 2,000 acres, we will organize a supplier alliance to develop domestic parts and components manufacturing enterprises and brand enterprises through functions such as product display, trademark registration, public logistics, and public settlement. The preferred platform for the North American market is to create a professional service platform for North American parts companies to open up the Chinese market.
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The automobile market has developed rapidly in recent years with China's rapidly developing economy. The corresponding auto parts also earn platinum. Auto Parts City has concentrated on the owners of large and small auto parts products. It mainly uses leasing shops as an important business activity and main profit-making method. As the climax of the Chinese automotive market receded, the auto industry gradually showed a weak growth momentum. The same was true for the auto parts industry, which also led directly to the decline of profits in Auto Parts City. How to reverse the current unfavorable situation is to passively wait for the market to pick up, continue to maintain the existing development model, or change business strategies, innovate development ideas, and seek new breakthroughs. In the face of an increasingly fierce market competition environment, operators of Auto Parts City must make choices as soon as possible. Recently, with regard to the innovative development model of Auto Parts City and how to develop profitable channels, we visited Chen Hai, General Manager of International Automobile and Parts Brand Exhibition Center.