China's internet giants make inroads into auto industry

Want China Times, Staff Reporter 2015-04-19

The internet and auto industry. (Photo/CFP)

Alibaba Group, the world's biggest e-commerce company, announced on April 8 that it has formed an automotive unit in partnership with nearly 50 car brands and 10,000 dealerships.

The Hanghzou-based company's aim is to provide O2O (online to offline) services and it will present its auto operations at the Shanghai auto show next week.

"Until now, buyers have had no more contact with auto companies once purchase is completed unless there are problems with the quality," said Peter Zhou, vice president of AutoNavi Software under the Alibaba Group.

That situation is about to change. Alibaba is currently working with SAIC Motor, China's leading car manufacturer, among others, to help it connect with existing and potential buyers and work with its cooperation partners to tap the B2B (business to business) services.

In March, Alibaba started a 1 billion yuan (US$160 million) fund with SAIC Motor to create a platform for the development and operation of Web-enabled cars.

Zhou said that Alibaba Group has data on 60 million car owners and 500,000 car showrooms and that its Tmall online marketplace could provide finance, payment and car insurance services.

Alibaba's automotive unit will provide "browse, select, purchase, use and sell" facilities all at the same time, Zhou said.

In addition to the Alibaba Group, fellow internet giants Tencent and Baidu have also been working with auto firms to make inroads into the industry.

Securities Times pointed out as the pace of output and sales of automobiles in China slows, and traditional car enterprises are facing the need to transform, it is time for the internet giants to make inroads into the auto market.