Haier’s Acquisition of Autohome: Why is a Refrigerator Company Buying a Car Platform?

Haier’s Acquisition of Autohome: A Bold Move or a Recipe for Disaster?

Recent announcements from Autohome, a leading online automotive platform in China, have confirmed the completion of its acquisition by Haier, the multinational home appliance and consumer electronics giant. This move raises eyebrows, prompting a deeper examination of the motivations behind it and the challenges that lie ahead.

After a six-month endeavor and a hefty $1.8 billion (approximately RMB 13 billion) investment, Haier secured a 43.0% stake in Autohome from Ping An Insurance, effectively becoming the controlling shareholder. While Ping An’s Yunchen Capital retains a 5.1% stake and a board seat, the shift in leadership, with a Haier-affiliated CEO now at the helm, suggests imminent strategic shifts.

The immediate question on many minds revolves around potential synergies. Will Autohome’s platform soon feature prominent advertising for Haier products or its used car platform, Katai Chi? The acquisition of an automotive platform by an appliance manufacturer is undeniably more intriguing, and dare we say, perplexing, than when a financial institution held the reins.

However, the timing of this acquisition is crucial. Autohome’s financial performance has waned in recent years, reminiscent of PCPOP, a tech website that lost its way after its founder’s departure. From 2020 to 2024, Autohome’s revenue declined from RMB 8.66 billion to RMB 7.04 billion, while profits plummeted from RMB 3.41 billion to RMB 1.68 billion.

Can a change in ownership alone revitalize Autohome? Skepticism abounds, especially considering the platform’s past reputation for excessive advertising, the proliferation of “fake” users and orchestrated commentary that stifled genuine feedback, leading to a significant erosion of trust.

The decline in Autohome’s content quality, transforming it into a stage for auto companies to engage in manufactured enthusiasm, has alienated its user base. This deterioration is intrinsically linked to its ownership transitions.

Initially, Autohome’s monetization strategy was relatively restrained. Founded in 2005 as an automotive enthusiast forum, its objectivity and lack of promotional spending allowed it to organically surpass competitors like PCPOP, led by Li Xiang, and establish itself as a leading automotive vertical media platform. Its emphasis on practical features, such as comprehensive car data and image galleries, proved particularly successful.

However, internal conflict regarding “commercialization” emerged in 2008. Li Xiang prioritized user experience over immediate financial gains, a strategy opposed by some early investors who orchestrated a power shift. Ultimately, Li Xiang maintained his position, but at the cost of allowing Telstra, an Australian telecommunications company, to become the new controlling shareholder, setting Autohome on an irreversible course toward aggressive monetization.

The introduction of “lead generation” services in 2009 exemplified this shift. This practice essentially involved selling user data to dealerships, resulting in relentless phone calls and aggressive sales tactics. Even individuals who explicitly declined interest were categorized as “defeated leads” and subjected to continued harassment, a testament to the platform’s pursuit of revenue at the expense of user experience.

Despite its invasive nature, the lead generation model proved lucrative, paving the way for Autohome’s U.S. IPO in 2013. However, this success came at a cost. Li Xiang, who later founded Li Auto, expressed his frustration with Autohome’s lack of competition and its focus on easy profits.

By 2016, Telstra, facing its own business challenges, sold its stake in Autohome to Ping An Insurance. The financial giant’s acquisition was primarily driven by its desire to expand into auto finance, leading to a culture of prioritizing key performance indicators (KPIs) and a further decline in content quality and user trust.

Ironically, Ping An’s ownership of Autohome did not translate into a larger market share in the car insurance sector. Instead, Autohome grappled with dwindling advertising revenue and declining lead generation income. This decline can be attributed, in part, to the waning relevance of traditional automotive portals.

According to a report by QuestMobile, the user base of automotive information apps is shrinking as consumers increasingly turn to short-video platforms like Douyin and Xiaohongshu for car reviews and testimonials from real owners. This shift has created a vicious cycle, with declining viewership leading to reduced advertising revenue, leaving Autohome struggling to maintain its market share.

The emergence of ByteDance’s Dongchedi, which integrated Douyin’s short-video approach, further exacerbated Autohome’s challenges. Dongchedi prioritized short-form video content, leveraging user-generated content and investing in high-quality, expensive features like winter and summer-testing programs. While even Dongchedi’s content has drawn some controversy, its video quality far surpassed Autohome’s.

Autohome’s attempts to launch its own video content were hampered by a lack of promotion on other platforms. Meanwhile, its lead generation model became obsolete.

Autohome’s CPT (cost-per-time) model charged dealerships based on usage time, providing access to user data for a fixed period. However, if leads proved ineffective, dealerships often blamed car manufacturers’ marketing efforts. Dongchedi’s 2022 introduction of a CPS (cost-per-sale) model disrupted the market by charging dealerships only for successful sales, directly challenging the efficacy of Autohome’s lead generation services.

In response, Autohome pursued a series of initiatives, including Autohome Space offline stores and VR car viewing, all of which failed to generate significant revenue.

Therefore, Haier’s acquisition of Autohome faces significant challenges. While potential synergies exist between Autohome and Haier’s used car platform, Katai Chi, and the potential to expand into electric vehicle charging infrastructure and connected home ecosystems, the fundamental issue is that Haier needs Autohome more than Autohome needs Haier.

This disparity could prevent addressing Autohome’s core problem, that too few people are focused on improving the user experience. Since Li Xiang’s departure, this problem has been largely ignored, but it remains Autohome’s biggest impediment.

If a media platform loses its users’ support, bringing on more shareholders will only delay the inevitable. Autohome needs more than capital; it needs a vision for a sustainable future that prioritizes user experience and content quality.