——Interview with Baturu Founder and Chairman Zeng Wan Gui

Reporter | Zhang Mingyan

Source | China Trade Finance Network

The automotive aftermarket, with over a century of history, was born alongside automobiles.

The Chinese automotive aftermarket emerged only four decades ago. It can be said that the aftermarket, in its pursuit of efficiency and value, has distinct Chinese characteristics. In different eras, many aftermarket practitioners have been thinking and experimenting, but regrettably, few have persisted to deeply explore the industry's value.

With the introduction of internet technology, the automotive aftermarket has gradually been given space to create new value. Among them, a key enterprise is the automotive aftermarket leading platform—Baturu. As an industrial internet platform, Baturu continuously taps into the value of the automotive aftermarket supply chain, enhancing industry transaction efficiency through internet technology.

Supply-side reform is a key link in the upgrading of the entire aftermarket industry. With the continuous penetration of informatization and networking technologies into the industry, the digital transformation and upgrading of the automotive aftermarket are also accelerating.

1 Establishing Industry Standards and Reshaping Transaction Processes

As the leader of the earliest industrial internet platform deeply engaged in the automotive aftermarket, Baturu founder and chairman Zeng Wan Gui revealed to the reporter that after graduating in 1997, he has been working in the automotive aftermarket supply chain field. In 2009, he began building a standard database for auto parts, founded Baturu in 2013, and by the end of 2014, with the launch of the e-commerce trading platform—"Auto Parts Shop", Baturu officially started online trading of automotive parts.

Zeng Wan Gui stated that the automotive aftermarket is a highly fragmented industry, with very backward transaction service scenarios. The original intention of building the industrial internet platform was to change the fragmented transaction scenarios of the automotive aftermarket, and by improving the operational efficiency of enterprises at various links, enhance the efficiency of the entire aftermarket supply chain.

The automotive aftermarket refers to a series of services generated from the landing of the complete vehicle to scrapping, including maintenance, beauty, modification, care, and more, while Baturu focuses on the most critical area—parts trading.

According to statistics from the Ministry of Public Security, as of March 2021, China's vehicle population has reached 287 million. As a "country with ten thousand cars", China has over 160 car brands, nearly 300,000 models, each car has over 10,000 parts, and each part has different manufacturers and qualities, so in the parts dimension, the involved data information is extremely vast—this is the supply scenario for parts.

On the demand side, there are over 600,000 auto repair enterprises nationwide, each with uncertain and complex procurement needs, and inconsistent requirements for delivery timeliness.

In such a highly fragmented, chaotic market with low circulation efficiency, no standards, no rules, and highly dependent on manual labor, how to solve the problems on both the supply and demand ends?

He stated that "standardization" and "intelligentization" are the solutions.

Zeng Wan Gui revealed that as early as 2009, he began working on industry "standardization", for example, in commodity standardization, starting from a certain car brand's certain series, first expanding product types vertically, then expanding the number of car brands horizontally, establishing the industry's most comprehensive car brand library, which also laid the foundation for Baturu's later standardization work.

To date, Baturu has accumulated relatively mature experience, tools, and systems in data standardization, commodity standardization, and process standardization, and has begun to output them to the industry.

In terms of intelligentization, on the basis of reshaping the industry transaction processes using internet technology, Baturu is gradually applying digital technologies to optimize industry resource allocation.

Due to the variety of parts, repair shop staff describe needs in vague and general terms, and there is no unified language expression system between supply and demand ends. Therefore, Baturu first built a massive parts database as an industry language "converter", translating through standardized data to enable direct and precise "dialogue" between supply and demand parties.

For the service-heavy aftermarket, after online information connectivity and reshaping of transaction processes between supply and demand, it is important to ensure offline delivery fulfillment.

"B-end transaction scenarios are complex, involving long supply chains, making fulfillment delivery very important," Zeng Wan Gui said. The Baturu platform, through informatization systems for the entire process of inquiry, quotation, payment, settlement, logistics, distribution, etc., further standardizes and upgrades warehouse management and logistics distribution between merchants, making the entire transaction process transparent and visible, ensuring transaction fulfillment quality.

Zeng Wan Gui revealed that Baturu started standardization work from trading to delivery early, stemming from years of offline accumulation, and then smoothly transitioned to the industrial internet platform.

2 Building Infrastructure and Deeply Empowering the Industry

The consumer market structure is relatively simple with very short chains; as long as online payment is solved, consumption can take place online. Unlike consumer internet, the industrial system is a highly specialized and divided system, involving numerous types of enterprises and complex decision roles. Parts go from factory to first-tier, second-tier, third-tier, fourth-tier distributors, and then to terminal repair shops. Except for the two ends, intermediate enterprises are both suppliers and customers to each other. Building infrastructure is much more difficult.

Baturu's positioning from the beginning was: focusing on automotive aftermarket infrastructure. Through years of experience accumulation, Baturu has used advanced technology to solve many transaction and delivery problems in traditional supply chains, precipitating data, systems, warehousing, distribution, service channels, and other infrastructure that can cover the complex supply chain of the automotive aftermarket.

In terms of "data", Baturu has established a database that matches models, parts, and Chinese names, digitizing all parts of the vehicle. Currently, Baturu's auto parts database covers 100+ car brands, over 200,000 mainstream models, achieving over 500 million parts matching relationships, covering 99% of mainstream models.

The "data" infrastructure improves the accuracy of intelligent inquiry and quotation in the parts trading process. It is understood that the Baturu platform's parts quotation rate reaches 98%, with a data error rate below 0.02%. In addition, "data" provides intelligent predictions and analysis for the business operations of its platform suppliers and franchisees.

In terms of "systems", Baturu has developed various systematized tools and platforms around logistics, information flow, and capital flow, including business platforms, trading platforms, merchant platforms, data platforms, etc., and is gradually opening these informatization systems to the industry, allowing traditional auto parts dealers who were highly reliant on manual labor to achieve cost reduction and efficiency increase through intelligent management systems.

The development of industrial internet also needs to make good use of logistics as a key element. Zeng Wan Gui said that auto parts logistics has high requirements for timeliness and professionalism, so the auto parts industry's logistics consists of massive, professional vertical individual logistics, which consumes a lot for the entire industry. Multi-level warehousing further increases circulation costs and reduces transaction efficiency. To improve the industry's logistics efficiency, Baturu has integrated resources in this area, making it a support point for offline delivery.

Doing industrial internet is a complex matter, encountering various challenges in development. Regarding this, he said that industrial internet is a "slow" endeavor that requires a "long-termism" spirit. All entities in the supply chain must perform their respective roles and positioning well, while the industrial internet platform must penetrate and deepen the industry vertically through technology and digital capabilities, empowering each entity, ultimately achieving industry collaboration and solving the problems of low efficiency and low quality in traditional industries.

Regarding the digitalization trend, Zeng Wan Gui believes that new infrastructure will drive industrial internet to penetrate deeply into various industries, accelerating industry digitalization. Among new infrastructure projects, 5G, big data, artificial intelligence, etc., are the core foundations and key guarantees for developing industrial internet.