K-Car has selected ‘RABBIT’ as the trend keyword for the used car market in 2023. RABBIT stands for six core trends: ▲Responsibility (enhancing corporate social responsibility) ▲Advancement of the market (development of the used car market) ▲Buy online (expanding online purchases) ▲Beneficial service (expansion and improvement of warranty services) ▲Increasing woman customers (growth in female buyers) ▲Twenties (growth in buyers in their twenties).
R: Responsibility (enhancing corporate social responsibility)
Expectations are high for increased ESG activities in the used car industry to fulfill corporate social responsibility. K-Car is enhancing resource recycling activities.
After donating 1,000 upcycled clothing items to ‘Hope Nursing Home’ last November, K-Car plans to sell props used in their brand advertisements through charity auctions by the end of this month, with all proceeds going to the World Wildlife Fund. Environmental cleanup activities near business locations have also been ongoing since last July. Lotte Rental is contributing to reduced carbon emissions by expanding eco-friendly used car sales.
A: Advancement of the market (development of the used car market)
The used car market is expected to see qualitative growth next year. Leading company K-Car introduced the industry’s first e-commerce dedicated branch, ‘Home Service Mega Center,’ with a one-stop merchandising process last quarter. They are also expected to enhance their e-commerce capabilities further by improving AI curation services. With the entry of complete car and rental car companies into the used car market, a more stable and trustworthy environment is anticipated.
B: Buy online (expanding online purchases)
Due to the non-face-to-face purchasing trend accelerated by COVID-19, the way of buying used cars online is expected to become more active. According to market research firm Frost & Sullivan, the online penetration rate in the domestic used car market is expected to reach 6.3% next year, a 3.8% increase compared to this year. In K-Car’s case, about 50% of total retail sales are already processed through the ‘Buy My Car’ home service, capturing approximately 81% of the domestic used car e-commerce market share. Other companies, including complete car manufacturers and new entrants, are also accelerating online sales.
B: Beneficial service (expansion and improvement of warranty services)
With rising demand for used cars, interest in used car repairs has similarly increased. As of Q3 2022, 45.1% of K-Car customers subscribed to the quality assurance extension service ‘K-Car Warranty,’ showing an increase of about 2.8% compared to Q2. Benefitting from this popularity, K-Car recently revamped the KW by extending its warranty coverage and duration. Besides that, various services that alleviate consumer concerns after purchasing used cars, such as Enka’s ‘Enka Guarantee’ and Ribbon Car’s ‘Extended Warranty Service,’ are being launched in the industry.
I: Increasing woman customers (growth in female buyers)
The proportion of female customers in the used car market is also expected to increase. This year, the upward trend of female used car buyers was noticeable, with K-Car’s female buyer numbers rising by 17.3% compared to the previous year.
T: Twenties (growth in buyers in their twenties)
The purchase of used cars among buyers in their twenties, who were relatively few, is projected to grow. K-Car’s customer purchase share in their twenties rose sharply from 10.3% in 2018 to 18.5% as of Q3 2022. Among this group, online buyers were 26% higher than offline buyers, indicating a greater comfort with online purchasing environments.
Jeong Inguk, CEO of K-Car, stated, “Despite many variables in the used car market this year, K-Car has been providing services that consumers most need through expertise and trust built over 22 years. In the upcoming Year of the Rabbit, K-Car employees will continue to offer high-quality direct-used cars and the best services.”
Lee Sang-jin daedusj@autodiary.kr