Lubes Vie for Attention at Car Supermarket

On a recent Friday afternoon in the downtown district of Jiangsu provinces capital city, Nanjing, several customers strolled through Chinese retailer Suning Commerce Groups first auto supermarket, or qi che chao shi, without realizing that the new type of store offered numerous options for buying lubricants.

The automotive superstore, opened last month as a flagship for Sunings new concept, sells and leases automobiles, as well as vehicle services such as insurance packages and car care products such as cleaning accessories and lubricants.

It was lunchtime, and this reporter observed several customers checking out display models of international luxury makes such as Audi and Maserati while seemingly oblivious to the presence of other products displayed around the showroom.

Sales are very slow, a lubricants sales representative remarked. The advertising is mostly for cars, rather than car care products, so people probably dont even know that the store also sells lubes, she added, pointing out that the concept is still so new that most consumers likely havent quite caught on yet.

A customer who offered only his surname, Sun, was surprised when he was told there are car care products around the corner. No, I didnt know lubes are also sold here, Sun said, adding he might think about buying lubes in the store if the oil change service is provided. It is, a Suning official pointed out, as long as the customer leaves her car in Sunings parking area.

Photo: Wang Fangqing / Lube Report Asia

Its common for Chinese car owners to pay for packaged services that include car titles or leases along with auto insurance plans and other services, at automakers authorized 4S stores. 4S stores tie-in a vehicle sale with associated spare parts, services and surveys.

Suning hopes its automobile supermarket will compete against 4S stores by offering more transparent prices and by offering less restrictive tie-ins. Suning gained customers trust after decades of practice in the retail sector, and people know that we only sell authentic products, said Liu Donghao, a Suning president in charge of its automobile sector.

The store in Nanjing, where Suning is headquartered, is a pilot project, Liu said. As Suning follows its plan to open 100 such stores in China in coming years, the concept will be improved and optimized over time. Liu is confident that it will eventually turn a profit.

Selling car care products and even cars online is not new in China, but opening brick-and-mortar stores that wrap up all aspects of car ownership into an online-to-offline (O2O) platform is, Suning says. Thats because retailers realize that providing a one-stop-shop platform for car owners to access the right aftermarket services and products is becoming increasingly important.

Online-to-offline commerce is a business strategy that draws potential customers from online channels to physical stores. Some of the Suning car market's offerings are traditionally only available online. Suning entices cusomers identified online to come to the store to geta variety of car products and services at the same time under one roof.

One of Sunings competitors, Gome, for example, announced in late March its ambition to enter the aftermarket area. At its regional stores, Gome is recruiting local 4S operators, car dealers and car financing service providers to unite to create a one-stop shopping experience.

Photo: Wang Fangqing / Lube Report Asia

At the Nanjing stores lube section, customers can choose among big brands including Sinopec, Mobil and Shell. Regional lube producers such as Nanjing-based Lopal; Beijing-based Tongyi and Liaocheng; or Shandong province-based Ogistar are interested in the channel as well, Liu said.

But Suning does have some criteria when it comes to brand selection. We only welcome recognized brands with solid reputations, Liu said. There is no entry fee, and as an O2O platform, we can offer brands many options to work together.