Alibaba in the Automotive Market in China, 2017–2025
Alibaba is leading a new wave in the automotive market in China. It is enhancing its supply chain to a higher and concentrated vertical level, by interconnecting leading automotive original equipment manufacturers (OEMs), small and medium enterprises (SMEs), distributors, retailers, and consumers from offline presence to online involvement.
More than 50 automotive OEMs have penetrated into Tmall’s official online flagship store since 2010. For instance, Tmall achieved a total of 150,000 units of new car sales within 24 hours on the Double 11 (11.11) Day in China in 2017. It achieved 50% year-on-year (YoY) growth rate during 2016–2017.
Alibaba’s key automotive products and services include new cars, used cars, automotive parts, and aftermarket services, such as car repair and maintenance. Alibaba’s revenue is generated from online store security deposit, software annual fee, and commission-based charge per purchase. Besides, Alibaba offers a one-stop service including car insurance, loans, and various payment solutions. There are 4 main eCommerce platforms involved in automotive market: Alibaba, Alibaba International, Tmall, and Taobao.
Alibaba is integrating online-to-offline (O2O) activities, from online parts purchasing to offline installation process. Besides, the Super Test Drive development of Tmall’s automotive vending machine is subverting the traditional automotive retail into a 24x7 fully automatic vehicle test drive through face recognition feature, which is leading a new retail concept with a digital entertainment element.
Alibaba’s ecosystem is stimulating high-synergy advancement through cloud computing, operating system, data management, artificial intelligence (AI), sales platform, digital entertainment, professional service providers, O2O, mobile browser, social network, location-based service, logistics, and financial payment solution. Going further, automotive OEMs are likely to deeply cooperate with Alibaba, especially in Big Data operation and Internet cars development. Internet cars is one of the new car sales motivators in short-to-long term in China.
The goal of this study is to evaluate the impact of Alibaba on the automotive market in China, focusing on new car, used car, and parts retail and repair and maintenance services. It analyzes the company’s potential impact on the growth and performance of the overall automotive retail market and the capabilities of advanced technologies such as AI and Big Data analytics. The study discusses the expected development of Alibaba in the automotive market until 2025.
To provide an overview of Alibaba’s business models and eCommerce platforms
To discuss the development of Alibaba’s B2B and B2C platforms in the automotive context
To provide market insights on Alibaba’s current and future offerings in the automotive market
To present information about Alibaba’s potentialities that are critical to the eCommerce business across the repair and maintenance services, new cars, used cars, and parts retailing segments
To evaluate the eCommerce growth opportunities for stakeholders to grow in new car, used car, and parts sales, as well as insurance and repair and maintenance services in the Chinese automotive market
Key Issues Addressed
What are the eCommerce opportunities for Alibaba in the automotive business?
What are the key benefits offered to automotive market participants and consumers, and how do they impact the participants?
What are the main pricing and cost models, and what are the developments expected from Alibaba for the automotive market in long term?
What are the core offerings and exclusive value offerings of Alibaba provided to the automotive market and how do they influence the market?
How is the Alibaba’s online set-up in the new car, used car, and parts retail segments?