273 Second-hand Car Trading Network Business Model Research

The market for used cars in China thrives as the number of used cars being traded keeps a quick pace of growth. However, the market for used cars in China is still in its infancy. In this market, there is a lack of developed mechanism for trading used cars, deals are being made in primitive forms and both consumers and dealers are seriously confused by issues induced by information asymmetry, such as the lack of transparency with respect to car conditions and irrational pricing gaps. Violation of consumers’ rights is a common occurrence. All these constitute a big obstacle to further growth of the market in China. As a result of the advances in Internet and mobile Internet, many novel online business models emerged to trade used cars. Online dealers gradually eliminate the information asymmetry on pricing by using Internet and big data technologies and make car conditions transparent by using professional inspection methods. Moreover, online dealers are playing the role of Internet platforms, so it makes it convenient to do cross-city deals. With "Internet+ used cars", the market is presenting more room for imagination, and many start-ups are vying to become online used car dealers.This paper presents a study on the business model of 273.cn, an online used car dealer from the perspective of business model based on theories of business model, and then on the basis of the study, attempts to design a new business model with core competitive advantages for 273.cn by combining theories of business model innovation with characteristics of the used car dealing industry. Firstly, based on summarization and analysis of academic research results in the field of business model, this paper clarifies what a business model means from four perspectives, namely definition, elements, nature and theoretical model, and concludes that business model is a transaction structure comprised of elements and it is the logic used to describe value proposition, value creation, value transfer and value capture. Secondly, this paper gives an overview of the market for used cars in China, and an analysis of major business models used by online dealers. This is followed by an analysis of the business model employed by 273.cn under the framework of the Nine Factor Model, a frequently quoted model in the theories of business model, and the analysis concludes that in terms of expanding the inflow of used cars and promoting cross-city deals, the C2C transaction service model, now the model employed by 273.cn, is outperformed by the auction model, now the dominant model employed by B2B networks, therefore 273.cn is now competitively disadvantaged and must restructure its business model. Finally, this paper, on the basis of business model innovation theories, presents recommendations for restructuring the business model of 273.cn and according these recommendations,273.cn shall restructure its current business model, which focuses on brokerage of used cars to build a "comprehensive one-stop O2O service platform for used cars" with the long-term aim of becoming an open 020 car service platform to include all service providers along the car consumption process to provide consumers with diversified life-cycle services through both online and offline channels.