A car may be a significant purchase for most consumers in China, but Alibaba is working to prove that no big-ticket item is too major to buy on Tmall. As China’s biggest e-tailer pushes ahead with auto e-commerce, it’s adding US automaker Ford to its lineup of auto brand partners, according to an announcement last week.
The new agreement between Ford and Alibaba covers four Alibaba business units and will involve cooperation on AI, cloud computing, smart vehicles, and the sales process including pre-sales, test drives, and leasing. The two companies are also reportedly looking at test sales of Ford cars on Tmall as well as through Alibaba’s “auto vending machine” concept. Currently in development, this new omnichannel sales format would allow users to purchase a car on their mobile device and have it immediately delivered to them at an automated storage facility.
Over half of international luxury auto brands in L2’s China: Luxury Auto Insight report maintain an official Tmall shop, with eight of them selling cars on the e-commerce platform. The most accessible models are generally the highest sellers, with Volvo’s XC60 leading in unit sales. Other brands selling cars on Tmall include Mercedes-Benz’s Smart, Jaguar, and Land Rover. Auto brands such as Maserati have signed onto Tmall in order to reach consumers in lower-tier Chinese cities that don’t yet have dealerships.
Alibaba is also racing against Chinese tech giants Baidu and Tencent to hit the road with its smart car software AliOS. Prior to its partnership with Ford, it announced in October that it is partnering with the joint venture between SAIC and Dongfeng Peugeot Citroen to release a smart car in 2018.
Meanwhile, Ford has been ramping up its China production. In November, it formed a joint venture with Chinese automaker Zotye to create a new Chinese electric vehicle brand, and announced in June this year that it will be moving production of its Focus from Michigan to China.
As both automakers and tech companies pursue these digital disruptions in China’s car market, Chinese consumers are open to change and have shown the highest willingness globally to purchase cars online.