The new @UTO Motto: Why makers of 2-wheelers, cars are embracing ecommerce

Dealerships remain the primary point of sale, but this is a fast-evolving scenario, catalysed by both Amazon as well as Flipkart introducing the auto category last year

A 22-year-old student from Maharashtra doing Google searches for electric scooters was surprised when the algorithm led him to Amazon.in, the Indian online marketplace owned by the United States-based online retail giant. As he clicked on the link, the student realised he could not only preview an electric two-wheeler but also see what others felt about it.
 

He could read reviews from buyers (80 per cent positive ratings from more than 100 customers), recent sales (100 units in the preceding month) and learn that the bike could go 120 km on a single charge if driven at 45 km an hour – something that bolstered his confidence in the product because it was drawn from real-life experiences.
 

Most importantly, he realised he could buy the bike online and have it delivered to his doorstep. As this piece is being finalised, the student could be clicking his booking, with probably a financing option thrown in.
 

This — customers buying vehicles online — was only a matter of time. As an electric two-wheeler dealer in the eastern suburb of Bhandup in Mumbai says, if people can order smart televisions and iPhones online, what could possibly prevent them from buying a set of wheels?
 

“Most customers still walk into the nearby showroom to make the purchase. But listing products on ecommerce may become a game-changer, at least for two-wheelers. This will generate more relevant leads for us,” says the dealer, requesting not to be identified.
 

No wonder, Hero MotoCorp, Hero Electric, and Ampere are selling their two-wheelers through ecommerce platforms such as Amazon and Flipkart. Not just two-wheeler makers, carmakers are boarding e-commerce as well, the common factor being that the charge is being led by electric vehicles.
 

Hyundai Motor, which recently tied up with Amazon in the US to sell its cars, sells its premium electric vehicle, IONIQ 5, in India through a dedicated portal.
 

“IONIQ 5’s sales process has been designed to provide a seamless customer experience... HMI, through a dedicated portal, collects the payment from the customer and directly invoices the vehicle in the customer’s name,” says Tarun Garg, Hyundai’s India Chief Operating Officer.
 

In April, Toyota Kirloskar Motor announced Wheels on Web, an online retail sales platform for the Bengaluru region. "Our objective here is to provide value-added services to enable convenient car purchasing processes, facilitating end-to-end transaction, including secured online payments as a one-stop shop,” the company’s vice-president, sales and strategic marketing, Atul Sood said in a press release.
 

Dealerships remain the primary point of sale, but this is a fast evolving scenario, catalysed by both Amazon as well as Flipkart introducing the auto category on their platforms last year.
 

The deal with dealerships
 

“While our dealerships continue to be the primary point of sale, we do take online bookings from our website too. In the past, we have listed our products at Amazon for the accessibility and convenience it offers to customers. Ecommerce platforms do offer great visibility and an extended reach for products, hence we have plans to list our product portfolio on online direct selling platforms in the future as well,” says Sohinder Gill, Chief Executive Officer of Hero Electric.
 

Hyundai, for its part, has set up a premium command centre for online customer engagement and consultation, though its dealers continue to manage the offline part of customer purchases, such as enquiry capturing, offline consultation, test drives, finance coordination and documentation, permanent registration, and delivery.
 

“We have delivered more than 1,100 units in less than a year through this model. We believe that the transparency of customer engagement has been enhanced with precise communication on waiting periods and uniform communication on price. As the stock is owned by HMI, franchisees have benefited by way of reduced costs because of no inventory. Also, receiving direct information on customer preference for colour and location has helped improve the demand supply management and allocation,” says Garg.
 

Greaves Electric Mobility, which sells Ampere scooters, says making its vehicles more accessible to a broader audience is integral to its mission. “By leveraging online channels such as Amazon and Flipkart, we aim to break down barriers and ensure that our mobility solutions are within easy reach of everyone,” a Greaves Electric spokesperson said in a text message.
 

Puneet Gupta, director-mobility, with S&P Global, points out that online helps a vehicle maker offer a more uniform experience for the buyer, and better inventory management. “The primary reason carmakers are opting for online mode of sales, at least as the first step, is to offer better customer experiences. Secondly, there is higher control over discounts and over dealers as such,” he says.
 

Mass vs luxury
 

A Mercedes Benz India spokesperson says if someone in Pune chooses a certain model in a particular colour that is available with a dealer in Hyderabad, it can get delivered in Pune. Mercedes was one of the first to start direct-to-consumer (online) sales in 2019, even before the pandemic. “When we began, we wanted to ensure that ordering a car is as easy as ordering a book online,” the spokesperson said, adding that online sales gathered steam during the pandemic.
 

About 20 per cent of Mercedes sales in India now come from its online platform. 
 

Another luxury carmaker, Volvo, has started direct-to-consumer sales in India, where the customer can book a car online from a central pool maintained by the company. 
 

Volvo would send the invoice to the customer directly. 
 

Jyoti Malhotra, managing director, Volvo Cars India told Business Standard in September: “We will have an omni-channel model in India. Retailers are still very important for us and they are part of the customer’s experiential journey like a test drive, or making the deliveries, etc.”
 

Maintaining a central pool is easier for a luxury carmaker, as its volumes are low. It is a different story for mass market players, which makes them try out different models.
 

Flipkart announced its auto category in July 2022. At present, it has brands such as Hero, Ampere, Odysse and Okaya in the petrol and electric categories. According to media reports last year, Flipkart saw a 10-fold increase in searches since it launched the category.
 

The ecommerce company did not respond to email queries from Business Standard. But a note on its website says: "When you purchase a bike online, you are certain to receive an excellent bargain. The seller puts savings from transportation costs towards the buyer and if you wait for a sale season, you will be able to get even better discounts. Also, shopping online for a bike gives you access to insight from verified customers regarding its quality and performance."
 

Amazon launched the category in September last year, and has eight brands such as Okaya, Yugbike, VIDA, Ketron and others. Amazon did not respond to a questionnaire. However, it explains on its platform how to buy an electric vehicle, saying the price of the vehicle will be ex-showroom and the price on Amazon will exclude insurance, registration, road tax and number plate charges. 
 

Niche and nascent at the moment, online automotive sales are definitely going to become a major category in the coming years, says Gupta of S&P Global. “Globally, this has been the trend – see, for example, Tesla – and India won't be far behind.”