Baidu gets into China’s booming used car market with $170M investment

Baidu, China’s top search engine, today revealed that it joined in a US$170 million investment for a startup site that specializes in selling second-hand cars. The funding for Uxin means that the four-year-old startup has so far raised over $430 million thanks to a massive US$260 million injection of capital from Warburg Pincus in September last year.

China’s car market has boomed in the past decade, and now analysts expect the country’s second-hand car sector to grow as a corollary to that. The nation’s used car market hit US$58 billion in transactions in 2014, up 26 percent from the year before, according to CADA, the China Automobile Dealers Association. Although China’s new car sales are slowing in recent years, the sheer number of new rides out there (23.5 million new vehicles sold in 2014) suggests that the second-hand space still has a lot of room for growth.

Used cars still a dodgy market

The startup that Baidu invested in started out doing business-to-business sales of its curated second-hand vehicles (that section is called Uxin Pai), but the more recently launched Uxin is focused on sales to ordinary consumers, and that’s the focus of this funding. Uxin works as a platform that connects auto retailers and used car buyers . It has 1,000 specialists in 50 Chinese cities who inspect each car; buyers get a guarantee straight from Uxin (not from the dealership), along with a 15-day full refund if any undisclosed issues are found.

It also offers auto financing, which is a relatively untapped market in a country that prefers to pay for things upfront in cash.

Kaiser Kuo, Baidu’s director of international communications, says that the funding fits in with the search giant’s aim to help people find services on the web. “Baidu is focused on connecting people with services, and on offering an end-to-end, closed loop experience from initial query to payment and fulfillment. We want to provide people in the market for used cars with all the information they need, to connect them with the best, most reliable sellers, and to make their transaction as efficient and transparent as possible,” Kuo explained in a statement.

Uxin’s latest funding comes from Baidu, global investment firm KKR, and investment management firm Coatue.

See: Baidu puts Uber on the map in China, throws in funding