Smartphones will decide auto sales in India by 2022: Facebook-KPMG

Facebook and KPMG's latest Zero Friction Future Report on Auto Industry

Facebook & KPMG partnership under the ‘Zero Friction Future’ programme has released their second report titled “Eliminating friction in automobile path to purchase“. This report aims to understand the reasons that lead to dropouts in the path to purchase of an automobile, referred to as ‘friction’, which may lead to potential loss of revenue for brands. The study focusses on B2C purchases of four-wheelers and two-wheelers and takes mobile into consideration. The sales of commercial vehicles and enterprise sales of four-wheelers and two-wheelers are not included in the study.

The reports are authored by KPMG in India, based on primary research and insights based on the survey conducted by Nielsen India. KPMG in India, also interacted with industry experts to obtain their perspective on the possible approaches to reduce friction and improve upon the conversion rates.

Some of the key findings of the report are:

In the four-wheeler category, friction accounts for 26 per cent of consumer dropouts, and one third of this friction is caused by media.

Currently, only 1/3rd of the addressable population enter the purchase funnel as aware decision-makers/influencers of four-wheelers. Of these, a significant proportion of prospects abandon the purchase at different stages of the journey. Such dropouts could be on account of personal decision or unavailability of choice of product, or on account of dissatisfaction caused by media touch points at some stage of the purchase journey. 1/3rd of total friction loss in four-wheeler purchase funnel is attributable to media-related friction loss. Highest drop out — more than half of aware decision makers/influencers — occurs between the awareness and consideration stages, where a prospect is looking to ‘develop an interest in the category’ and usually enters the awareness stage with shortlisted models in mind

One-third of friction loss is caused by media touch points in four-wheeler purchase journey

In the two-wheeler category, friction accounts for 34 per cent of consumer dropouts, and nearly half of this friction is caused by media

Only about a half of the addressable population enters the purchase funnel as aware decision-makers/influencers of two-wheelers, of which more than two-thirds abandon the purchase at some stage of the purchase journey.
Two wheeler purchase journey shows considerably high friction at awareness stage, where almost more than one-in-three ‘aware decision makers/influencers’ do not proceed to the consideration stage. Moreover, one-third of this friction loss in two-wheeler purchase funnel is caused by media-related friction.

Mobile is expected to influence 4 out of 5 four wheeler, and 7 out of 10 two-wheeler purchases by 2022

Friction can impact marketing ROI and significantly hit a brand’s bottom line. The loss of even a single prospect can add to revenue loss, more so in case of luxury or high-end vehicles. Each and every sale counts, and according to this study, mobile has the ability to reduce media friction, creating a sales opportunity of approximately one million units for  four-wheeler brands and 2.6 million units for two-wheeler brands. Mobile could not only enable brands to add additional revenue, but also enhance consumer experience leading to more satisfied consumers.
Mobile could help four-wheeler brands Mobile could help two-wheeler brands

Facebook is expected to influence nearly one in two purchases of both four-wheelers and two wheelers by 2022

This growth is expected to be driven on the backdrop of organic penetration of internet, social media and digital technologies over the next five years.
facebook influence on automobile purchase

Mobile could reduce media friction by 1.2 per cent for four-wheelers, allowing the brands to tap into about 1 million units sales opportunity

Mobile has a potential to reduce media friction by 1.2 percentage

Mobile could reduce media friction by 1.6 per cent for two-wheelers, allowing the brands to Sources: tap into 2.6 million units sales opportunity.

Mobile has a potential to reduce media friction by 1.6 percentage

 

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