Move Aside Apple and Google! Alibaba is Entering the Connected Car Space
Alibaba’s name conjures images of an Arabian night and a kind, smart person who helped people in his village prosper. The Alibaba of our world is opening doors (Open Sesame) to small- and medium-sized enterprises across the globe in a manner no one ever dreamed of. However, the Alibaba of the 21st century is now entering not only our homes and businesses, but also the third-most connected device in the world – our cars.
Alibaba’s first venture into the automotive industry was the typical spare parts and used car sales portals. Recently, though, as the strength of the new car market has waned, OEMs and Alibaba have realized the need to build a strong digital presence and provide consumers with a better experience and customized service.
On Singles Day (After witnessing the euphoria in China this year, I think we should replace our Valentine’s Day or have an additional Single’s Day in the West.), November 11, close to car dealerships took part in the event and more than vehicle orders were placed through the B2C shopping platform Tmall.com. BMW even launched a flagship store on Tmall.com, selling discount coupons for maintenance and other brand-related merchandise. Chinese automotive accessory dealer Tuhu sold more than tires during the Singles Day event; these are some serious numbers.
In addition, independent repair shops across cities partnered with Tuhu to deliver and install the tires on customer cars (although I have to say, I struggle to understand the relationship between Single’s Day and buying tires, other than the heavy discount). Recently, even Federal Mogul announced a flagship store on Tmall. GM, Volkswagen and now even Tesla have joined the group of OEMs selling through Alibaba’s B2C platform Tmall.
Not happy just selling parts and cars online, Alibaba has now decided to address connected car solutions. Alibaba’s recent announcement of partnering with SAIC motors in China to develop an Internet car in two years flat sets an interesting precedent. They seem to be following what Google and Apple are trying to do in cars, but with a twist. While Apple and Google are focusing on the in-car app and smartphone experience, Alibaba is coming at it from a much larger focus: predictive analytics and cloud computing.
Alibaba’s partnership with SAIC is to grow the Inkanet connected car platform to the next level. The balance of power in the connected car space is shifting from B2C revenue-generating value proposition, including areas like software licensing, ads and services, to more long-term customer retention, focused on where the revenues and benefits will be generated at a B2B level within the OEMs. With this changing trend and the cloud and analytics capabilities of Alibaba given its retail/eCommerce background, the company is definitely poised to make greater inroads into areas like customer behavior analysis, loyalty and CRM-focused applications.
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