Alibaba Establishes Automotive Division

Alibaba Group Holding Limited is a Chinese e-commerce company that was initially started in 1999 as a business-to-business portal at Alibaba.com. The company was initially founded to connect Chinese manufacturers with overseas buyers, and has grown into a major force since that time to include electronic payment services, a shopping search engine and data-centric cloud computing services.

Now, China’s leading e-commerce company has announced the establishment of its automotive division to integrate its car services after approximately one year of planning for the organizational restructuring of the group. The company’s new integrated system includes car manufacturing, car sales and other auto services. According to Reuters, car dealers will now be able to use Alibaba’s services to input all of their vehicles into a database to promote their available cars to consumers. Additionally, customers will be provided with various online-to-offline (O2O) motor services, including new car and second-hand car transactions, localized services and auto financing.

Wang Licheng, the former leader of Alibaba’s group shopping platform Juhuasuan, will be heading up the company’s new car division. It has been reported that approximately 50 mainstream car brands have signed a contract with Alibaba’s automotive division, including BMW, Jaguar Land Rover, Cadillac, Volkswagen, Buick, Chevrolet and Toyota. The company also says that 10,000 dealerships have partnered with Alibaba in China.

Last month, Chinese automaker SAIC Motor Corp Ltd said that it would join forces with Alibaba to invest $161 million in a fund to develop Internet-connected cars. In addition to providing cloud computing support, Alibaba plans to add digital entertainment, maps and financial data to help spark innovation with traditional carmakers.

“Since last year, the Internet has been bringing some changes to the automotive industry,” said Wang. He explained that manufacturers such as BMW, Saic Motors and General Motors have also changed their approach to O2O auto services. Wang says that his group is expecting the auto industry to bring new developments to the Internet.

Wang has stated the company’s new division will continue to expand its services in the coming period. It will enter into partnerships with local and international car brands in April, and it will begin to sell imported cars in May. He says that a new app will be released by the division in late June.

The business of automotive e-commerce is burgeoning, and Alibaba’s automotive division is starting “at the right time,” said Wang.

The China Association of Automobile Manufacturers has released data that shows that a total of 23.49 million vehicles were sold in China last year. This illustrates an increase of 6.9 percent from the previous year, and makes China the largest auto market in the world for the sixth consecutive year.

Alibaba is already one of the largest technology companies in the world, and is a dominant force in China’s online space. According to online statistics portal Statista, China has over 300 million online shoppers, which makes it a leader in this realm, and Alibaba has risen exponentially due to this growth.