Recently, Tuhu Yangche, China's leading online and offline integrated automobile service platform, submitted a prospectus to the Hong Kong Stock Exchange for listing in Hong Kong.
According to the prospectus, Tuhu Yangche, founded in Shanghai in 2009, has covered most prefecture-level cities in China. With a customer-centric model and an efficient supply chain, Tuhu Provides a one-stop, fully digital, on-demand service experience that directly meets the diverse product and service needs of car owners, creating a vibrant automotive service ecosystem composed of car owners, suppliers, car service stores and other participants.
Over the past ten years, Tuhu Car has provided products and services to car owners, including tires and chassis parts, car maintenance, car repair, car beauty, auto parts and other related installation services, and is committed to allowing customers to enjoy quality services on the platform and purchase genuine automotive products at attractive prices. Up to now, Tuhu Can provide 44,000 models of automotive products from 239 car brands, including Pirelli, German Horse, Dunlop, Goodyear, ExxonMobil, Shell and 3M. Tuhu has also launched 33 own product brands and 34 exclusive product brands, covering tire and chassis parts, car maintenance products and so on.
At the same time, Tuhu Also provides auto parts and used car trading services, and provides platform services for all participants in the ecosystem, including advertising services and SaaS solutions for different businesses.
The number of Tuhu yangche stores across the country is also expanding rapidly. As of December 31, 2019, it had more than 1,400 Tuhu factory stores (self-operated and franchised) and more than 18,700 partner stores nationwide. As of September 30, 2021, the number of corresponding stores has increased to more than 3,300 and 33,000 respectively. In addition, as of September 30, 2021, 39% of franchisees have opened two or more Tuhu factory stores with Tuhu Yangche.
Benefiting from the growth of users and stores, Tuhu's car revenue has maintained a rapid growth trend in recent years. Even in 2020, which was greatly affected by the epidemic, the total revenue increased from 7 billion yuan in 2019 to 8.8 billion yuan, an increase of 24.3% year-on-year. At the same time, in the first three quarters of 2021, the total revenue exceeded 8.4 billion yuan, an increase of 41.8% year-on-year.
According to the China Insights report, as of September 30, 2021, Tuhu Yangcheng ranked first among all auto service providers in terms of the number of stores, and its automotive service revenue ranked first among IAM (Independent Aftermarket) participants in China.
The China Automotive Services Report also shows that in 2020, the scale of China's auto service market (including car repair and maintenance, car wash and car beauty, and installed parts) has reached 1.0 trillion yuan. As China's car insurance continues to grow, the mileage continues to increase, and the age of vehicles grows, it is expected that China's auto service market will reach 1.7 trillion yuan in 2025 at a compound annual growth rate of 10%.
At the same time, automotive service stores in China are currently operated by authorized dealers or IAM service providers. In 2020, authorized dealer stores accounted for approximately 59.5% of the total automotive services market (in terms of GMV). However, as vehicles age and more and more passenger car warranties expire or are about to expire, customers are gradually turning to IAM stores. As a result, IAM stores are expected to grow more than authorized dealers and will account for 54.1% of the automotive services market by 2025.
This contains great development opportunities for independent car service platforms such as Tuhu Car. In this IPO, Tuhu Yangche intends to use the funds raised to expand the company's store network and franchisee base in the next three years, especially in second-tier cities and counties, expand the company's offline support team, and further strengthen the company's relationship with franchisees. At the same time, Tuhu Yangche also intends to use part of the funds raised to develop and enhance the company's data analysis technology, so as to further improve operational efficiency and continue to recruit and retain R&D talents.
Tuhu Said in the prospectus that the company believes that data insight and technical capabilities are key advantages, and the company is committed to innovating the rules, management and delivery of automotive services through technological innovation, efficient operation management system and data insight. At present, the company has more than 900 R&D personnel, led by experts in their respective fields, including data analysis, industry digital solutions and intelligent store management. With strong internal R&D capabilities and industry insights, the company has developed a set of tailor-made proprietary technologies for China Automotive Services, covering parts matching big data platform, warehouse management system, transportation management system, order management system, store management system, technician support management system, etc. Improve the company's efficiency for the entire automotive service industry by implementing a digital end-to-end industry solution that covers all aspects of the automotive service value chain.
For example, by introducing automation and other technology-driven tools to stores on the platform, including self-designed automatic car washers and digital diagnostic databases, Tuhu Has achieved superior store operational efficiency and high store and technician utilization through this integrated solution. According to the report of China Insight Consulting, in 2020, the daily service turnover rate of each automobile station of Tuhu Car Is 2.4, which is much higher than the industry average (about 1.0 per car station per day).
According to the plan, in the future, tuhu car's digital capabilities will continue to provide users with affordable, genuine, high-quality product and service experience on the one hand, and on the other hand, it will optimize the operation and management capabilities of small and micro entrepreneurs franchise stores to help the industry to achieve common prosperity.