Cars

One-stop shop blooms in China's market

By Ariel Tung (China Daily)
Updated: 2010-11-18 13:56

NEW YORK - In 2000, when he was 26 years old, Li Bin founded BitAuto Holdings Ltd to provide Internet content and marketing services for the automobile industry in China. He called it a turning point for him in coming closer to the day when the growth of China's auto market links up to the growth of its Internet users.

The time seems ripe for Li to capitalize on his vision. According to the China Internet Network Information Center, China is now the world's largest online community with an internet population of 384 million. Internet users in China surpassed the entire population of the United States.

China also overtook the US as the world's largest auto market after its vehicle sales in 2009 jumped 46 percent from the previous year.

On Wednesday, Li's hopes came to fruition. He put BitAuto, the leading provider of marketing services for the world's fastest-growing automobile industry, up for an initial public offering (IPO) at the New York Stock Exchange.

Shares in the Beijing-based company posted a 3.7 percent gain after trading on the first day. A total of 10.6 million American Depositary shares were sold at the high end of its $10 to $12 range.

Li said that the company intends to use the net proceeds for product development, technology improvement and to provide a better quality of service to car dealers and consumers.

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The company's websites provide consumers with new and used car pricing information, specifications and reviews as well as marketing and advertising services to auto markets and dealers.

BitAuto sells a subscription service to car dealers, which allows them to place car-pricing information and to reach out to potential buyers through a "virtual" call center. Its subscriber base of automobile dealerships has grown to 2,783 in the first nine months of 2010 from 981 in 2007.

Li said that his business model caters largely to professionals in their 30s.

"Although China is now the largest automobile market in the world, it still represents a very small penetration. There is only 3.5 cars ownership per 100 people in China," Li said. "As China's economy rises, cars ownership can only go up. I believe to own a car is every Chinese's dream. The market is still largely untapped."

For the past three years, BitAuto has enjoyed more than 50 percent growth in revenue, said Andy Zhang, the company's CFO.