Alibaba Dives into the Auto Market

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The logo of Alibaba Group is seen inside the company's headquarters in Hangzhou

Alibaba continues to be one of the companies to watch as it continues to grow into different segments within the market. Recently a deal with signed between Alibaba and Shanghai General Motors as way to offer sales online and financing for GM vehicles to dealerships. This is not the first time that Alibaba has jumped into the automotive industry, as they also signed a deal with SAIC Motor Corp limited to set up $161 million in funds to support what was entitled “cars over the Internet”.

On top of this Alibaba has partnered with over 50 brands in the auto industry, including BMW, Jaguar Land Rover, Buick, Toyota, Chevrolet and Volkswagen. They are partnering with over 10,000 deal within China as well.

Future Plans in the Auto Industry

Within the auto industry, Alibaba has some big plans that is going to change the market in the near future. They are planning to set up a one stop shop automotive area in which they can offer car sales, auto services and even car manufacturing. For consumers, this is going to mean being able to find dealerships to buy their vehicles from, as well as second hand transactions for the purchase of automobiles, getting consumers connected with the right financing, and getting consumers connected to localized services.

Alibaba is encouraging the development of new cars that are based on what the Chinese consumer wants. This is in hopes of making the auto industry one in which weathers any economical or financial downturn that it can face. Plus, it helps to ensure consumers are getting what they want in a vehicle.

Currently, Alibaba does have a section of their Tmall website that is selling currently owned Buick, Cadillac and Chevrolet branded vehicles online. It is making the car buying experience one in which a consumer never has to leave home to research and plan for.

The Auto Market in China

The Chinese auto market is considered the largest auto market on a global level. With the involvement of Alibaba, the market share that China maintains is going to grow over the years. For the first half of 2014, sales in the auto market by brand were:

auto sales 2014

Chart courtesy of http://g.foolcdn.com/editorial/images/150759/china_half_2014_large.png

 

Last year, China sold 23.49 million vehicles

Why Alibaba is Joining the Auto Market

There are many reasons why Alibaba is joining in on the auto market. For one, this is going to result in more revenues for Alibaba. However, most professionals are pointing to all the information Alibaba is going to learn about their consumers from this market share. Through learning more about the consumer, Alibaba will have the ability to create more personalized marketing materials and be able to deliver on what the consumer desires.

Their jump into the auto market is on top of their spreading into the finance and entertainment market as well to serve the 2 billion customers they service globally.

Overall, Alibaba going into the auto market is no surprise to many, as the business giant is one in which  seems to know how to appease the consumer. This is just another method in which the company proves why they are considered the largest online business in China.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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