TuanChe Stock

TuanChe Limited operates an omni-channel automotive marketplace in China.

The company offers marketing solutions by integrating its online platform and offline sales events. The company’s online platform, which consists of its tuanche.com website, apps, official WeChat account, WeChat mini-programs, Cheshangtong, and other mobile outlets, serves as a platform for consumer acquisition and management. The company’s and the VIEs’ offline events bring consumers, auto dealers, automakers, and automotive service providers together to promote in-person interactions and direct comparisons across a broad selection of vehicles and related service offerings. The integration of these two components is essential to the company’s and the VIEs’ ability to offer comprehensive and efficient automobile transaction experiences for all participants, including consumers, automakers, auto dealers, and automotive service providers.

The company operates the following businesses:

Offline Marketing Solutions: The company and the variable interest entities (VIEs) turn individual and isolated automobile purchase transactions into large-scale collective purchase activities through its auto shows. By attracting a large number of consumers, these events serve as integrated marketing solutions to industry customers, which include automakers, franchised dealerships, secondary dealers and automotive service providers. The company and the VIEs enable interactions between large numbers of participants on both sides of a potential transaction, creating a many-to-many environment, within a short period of time, thus enhancing the value the company and the VIEs offer to both consumers and industry customer participants of its offline events. The company and the VIEs organize auto shows and charge industry customers for booth spaces in the auto shows. In addition, the company and the VIEs have developed special promotion event services to better support industry customers in organizing their special promotion events through various integrated services, including event planning and executing, marketing training and onsite coaching. The company and the VIEs charge fixed service fees for special promotion event services.

Referral Service for Commercial Bank: The company and the VIEs collaborate with and facilitates a commercial bank in expanding its cooperation with its and the VIEs’ industry customers to grow its auto loan business. The company and the VIEs charge the bank service fees for approved loan applications. The company and the VIEs ceased to operate the referral services in 2022.

Online Marketing Services and Others: The company and the VIEs provide online marketing services for its industry customers to increase the efficiency and effectiveness of their marketing campaigns.

The company’s and the VIEs’ business model features the integration of two complementary elements: its and the VIEs’ online platform and offline events. The online platform consists of its and the VIEs’ website, tuanche.com, official WeChat account, WeChat mini-program and mobile applications. Together, these channels promote the company’s and the VIEs’ offline events and serve as a consumer acquisition tool for the offline events. The company’s and the VIEs’ offline events provide consumers physical access to a broad selection of automobiles and serve as a gateway to useful data from consumer participants who have not previously entered their information on its and the VIEs’ online platform. With its and the VIEs’ data analytics capabilities, these data enhance the company’s and the VIEs’ understanding of the automobile demand in various localities and continuously improve the effectiveness of its and the VIEs’ event planning.

The company, together with the VIEs, complement its and the VIEs’ service offerings by collaborating with service and product providers in China’s automotive industry, such as aftermarket service providers, financial institutions, and insurance companies. By extending its and the VIEs’ services beyond automobile purchases, the company, together with the VIEs, offer consumers one-stop end-to-end shopping experience, establish ongoing relationships with consumers, and attract new consumers who are contemplating automobile purchases.

The company announced its plan to expand into the NEV industry in January 2021, and it announced its strategic collaboration with YangMing New Energy Technology (YangMing), Beijing S-TECH Technology (S-TECH) and IAT Automobile Technology Co., Ltd. (Shenzhen Stock Exchange: 300825) (IAT) to explore opportunities in and strengthen its capabilities in the NEV industry.

The company and the VIEs facilitated 90 special promotion events through its and the VIEs’ services in 2022.

In 2022, the company and the VIEs ceased to operate the referral services for a commercial bank.

Industry Customers

The company’s and the VIEs’ industry customers include a variety of businesses within China’s automotive industry, including automakers, franchised dealerships, secondary dealers, aftermarket service providers and others providing automotive services, such as insurance companies and financial institutions. The company generates its net revenues primarily from its and the VIEs’ industry customers that pay for booth spaces at the auto shows. The company and the VIEs determine the amount it and the VIEs charge primarily based on locations and sizes of exhibition booths.

As of December 31, 2022, the company and the VIEs had served over 3,112 industry customers in China, covering over 110 domestic and international automobile brands. The company and the VIEs facilitated the sale of 22,176 automobiles for its and the VIEs’ industry customers in 2022.

Consumers

The company, together with the VIEs, use both online and offline channels to effectively attract automobile consumers to participate in auto shows.

Online: The company’s and the VIEs’ own online channels consist of the tuanche.com website, its and the VIEs’ mobile apps, its and the VIEs’ official WeChat account and WeChat mini-program. As of December 31, 2022, the company had created customized city homepages for over 331 cities around China, each targeting local consumers. From January 1, 2016 to December 31, 2022, over 2.8 million consumers have entered their information on the company’s and the VIEs’ online platform.

The company and the VIEs also utilize online channels owned by others to attract prospective consumer participants to its and the VIEs’ offline sales events, such as search engines, social media, newsfeed apps, and online content aggregators.

Offline: The company and the VIEs work with various offline partners to attract participants to its and the VIEs’ offline events, such as traditional print media, television, radio, and billboards in the streets and subway stations. The company and the VIEs also rely on word-of-mouth referral by consumers who have participated in its and the VIEs’ events in the past.

Services

Offline Marketing Solutions

Auto Shows

The company, together with the VIEs, organize auto shows to create a many-to-many consumption environment for prospective local consumers. The company’s and the VIEs’ sales-oriented auto shows aim at facilitating successful transactions in a highly efficient and effective manner. The company, together with the VIEs, enable industry customers to display a large number of products within a short period of time at a reasonably low cost to an otherwise fragmented consumer base. The company and the VIEs charge participating industry customers for booth spaces, and the amount is determined by the locations and sizes of their requested exhibition booths. Usually the larger the area an industry customer wishes to occupy, and the closer the location is to the main entrance, the more the company and the VIEs charge.

The company’s and the VIEs’ organization of auto shows involves four phases, such as annual planning, event request initiation, event planning, and event execution.

Annual Planning: At the beginning of each year, the company and the VIEs plan the number of auto shows it and the VIEs target to organize in each region, and the cities it and the VIEs plan to revisit and expand into. The company and the VIEs also allocate budget for each region, which serves as a guideline for the specific event requests and action plans.

Event Request Initiation: Each auto show begins with the company’s and the VIEs’ field employees filling out an event request. The requests outline the basic information and budget breakdown of the auto shows. These requests are first reviewed by the regional supervisors who must approve the plan before presenting them to the head of operations at the company’s and the VIEs’ corporate headquarters.

Event Planning: After an event request passes the two-layered approval system, the field employees must submit specific action plans, covering the company’s and the VIEs’ coordination plans with venue, material and service providers, with industry customers and with public security authorities.

Event Execution: The company and the VIEs reach out to venue providers and enter into appropriate leasing arrangements. The company and the VIEs engage event set-up service providers to design the layout of its and the VIEs’ auto shows and set-up procedures based on the number of industry customers the company and the VIEs have solicited.

The company and the VIEs also concurrently coordinate with its and the VIEs’ industry customers. In general, the company and the VIEs begin contacting industry customers 30 days before each auto show to allow them sufficient time to arrange event-day logistics since they are responsible for transporting their own vehicles or other merchandise and materials to the auto show venues. In 2016, the company, together with the VIEs, introduced the TuanChe Carnival auto show model where it and the VIEs invited financial institutions, insurance companies, automotive service providers, car accessories manufacturers and other household goods and services providers, besides automakers and auto dealers in an effort to create a one-stop shopping experience for its consumer participants.

In 2022, the company hosted 150 auto shows across 76 cities in China.

Special Promotion Event Services

The company, together with the VIEs, began to provide special promotion event services to its and the VIEs’ industry customers in January 2019 to better support its industry customers in organizing their special promotion events. The company and the VIEs primarily provide a series of integrated services, such as event planning and executing, marketing training and onsite coaching, to support its and the VIEs’ industry customers’ special promotion events.

Referral Service for Commercial Bank

In October 2019, the company, together with the VIEs, commenced its and the VIEs’ referral services in collaboration with a commercial bank, where it and the VIEs facilitate the bank in expanding its cooperation with its industry customers to grow its auto loan business. In 2022, the company and the VIEs ceased to operate the referral services.

Online Marketing Services

The company and the VIEs have developed its and the VIEs’ online marketing services since 2018, catering to the sales and marketing needs of automakers and auto dealers. The company and the VIEs work closely with a large network of online and offline media outlets, and has access to abundant flow of information due to its and the VIEs’ social media resources.

The company’s and the VIEs’ online marketing services primarily include demand-side platform services, where it and the VIEs either provide online advertising services on its and the VIEs’ website or provide advertising space resale services in collaboration with third parties, such as search engines and other online advertising channels, and marketing information services, through which it and the VIEs provide industry customers with individual consumers’ demands information regarding their purchase preferences for automobiles generated through its and the VIEs’ online channels upon consumers’ consent.

Other Services

Social CRM cloud services

In 2020, the company acquired Longye International Limited, a leading system developer that develops and implements social customer relationship management cloud systems (social CRM cloud systems) to provide social CRM services to the automotive industry in China. As of the date of this annual report, its core social CRM service, Cheshangtong social CRM cloud system, has served more than 18,000 customers.

Aftermarket promotion services

The company provides aftermarket promotion service to support auto dealers’ aftermarket promotion events during a period.

Virtual Dealerships

The company, together with the VIEs, operated the virtual dealership business from 2018 to 2020, primarily serving automakers, franchised dealerships, and secondary dealers in tier-3 and below cities, helping them expand sales channels and source automobile inventory.

Sales and Marketing

The company’s and the VIEs’ nationwide in-house sales team is mainly responsible for attracting automakers and auto dealers to attend its and the VIEs’ offline events. As of December 31, 2022, the company had established relationships with over 3,110 industry customers across China. The company’s and the VIEs’ head sales office in Beijing is in charge of sales management, operational management and strategic decision-making. The company and the VIEs also have a dedicated marketing team responsible for both online and offline consumer acquisitions.

Depending on the size of the event, the company and the VIEs assign two to five salespersons to organize and supervise a particular auto show. The company’s and the VIEs’ sales and marketing team also organizes event-driven marketing activities with industry-leading e-commerce platforms and various local governments.

Intellectual Property

As of December 31, 2022, the company, together with the VIEs, held 159 registered trademarks in China, including the TuanChe trademarks. As of December 31, 2022, the company, together with the VIEs, had 112 registered domain names, including its main website domain names, tuanche.com, as well as one artwork copyright and 98 software copyrights in China.

Research and Development Expenses

The company’s research and development expenses included RMB19.8 million (US$2.9 million) in 2022.

History

TuanChe Limited was founded in 2010. The company was incorporated in the Cayman Islands in 2012.