Souche: A Game Changer in the Used Car Market?

This case describes Souche’s beginning in China’s used car market, which had suffered problems in trading due to asymmetric information. Junhong Yao, the founder of Souche, planned to build an O2O trading platform for used cars to eliminate these problems. However, when staring the business, Yao could not define the right path for such a plan. Instead, he and his team tested a simple product in the market, and then quickly and continually made adjustments based on the market’s reaction. In one year, their business model experienced two iterations, going from consignment sales to presales and then to an advisory model. Two months after the advisory model was put into operation, Yao discovered problems with the model and vetoed it. Now in early 2014, he again had to change the direction for the model. What would he do next?