Ecosystems

Alibaba Presses The Gas Pedal On Connected Car Apps

car driving

Even in the glory days of manual transmissions and leaded gasoline, driving was never just about driving, about getting from one point to another. Driving was about freedom, ego, escape and emotion.

Now, at the dawn of the connected vehicle age, China-based Alibaba is showing what driving will mean in the 21st century.

At the Shanghai Auto Show earlier this week, the eCommerce operator and digital payments provider reportedly said it is “developing apps for connected cars that will let drivers find restaurants, queue up and make reservations at restaurants, order food and eventually complete a plethora of other tasks using voice, motion or touch control.” Not only that, but Alibaba added that  “third-party developers are invited to make their in-car apps, which will run on Alibaba’s operating system AliOS.”

This stands as Alibaba’s latest effort to grab an early piece of the emerging ecosystem for connected vehicles. For instance, Honda previously announced it was teaming up with Alibaba Group’s AutoNavi business to develop new services for connected cars. The service centers around enabling drivers to make reservations using AutoNavi maps, as well as conduct payments with Alipay — and permitting drivers to pay for gas and parking via Alipay.

Payments Role

Indeed, when it comes to the connected car and truck ecosystem, payments have a position in the driver’s seat. Payments will unify many of the services, apps and technologies that will make consumers’ vehicle rolling centers of commerce, not just transportation devices — a trend highlighted by this latest move from Alibaba.

More specifically, it should be no surprise that gas stands as the biggest purchase for internet-connected commuters, according to the recent Digital Drive Report from PYMNTS. However, the fact that those consumers spent about $62.3 billion on such purchases in 2018 also indicates the importance of making sure connected vehicles enable not only in-vehicle and mobile fuel purchases, but navigation services, as well as loyalty and discount offers tied to such transactions.

Coffee, too, fuels commutes, as internet-connected consumers spent $16.7 billion worth on java last year, according to the PYMNTS research. They spent $43.9 billion on groceries, $47.2 billion on other foods and $5.8 billion on parking — all types of commerce being targeted by the emerging connected vehicle ecosystem, and all of which require collaboration between the automotive, retail, payments and mobile sectors.

The PYMNTS research found that 64 percent of commuters have downloaded apps to help make such purchases, and that 38.5 percent of payments made during commutes were done via apps, with food and coffee at the highest rate of app-enabled purchases. “More than half of all connected commuters who ordered coffee for pickup at a drive-through used apps to pay (54.1 percent), while slightly fewer commuters (48.8 percent) who ordered coffee near their workplace[s] to pick up [did] the same,” the report found.

Consumer Base

Making driving into a chance for more commerce and payments is a natural and massive opportunity. That’s because, according to the PYMNTS research, 135 million U.S. adults drive a car to work, with commutes ranging from as little as 15 minutes to over an hour. During this daily grind, motorists are driving $212 billion in commerce as they drive to and from their workplaces and homes. While much of today’s commuter commerce is powered by mobile devices, PYMNTS research indicates that offering these commuters in-vehicle connectivity could quickly shift their shopping activities into overdrive.

That research also found the connected vehicle ecosystem will, in large part, benefit from the consumer preferences of millennials. PYMNTS found that 82 percent of millennials would shop more during their commute if voice-activated technology was available. That was more than twice the rate of other commuters.

Mini Apps

To do so — to achieve such goals and reach such consumers — the connected vehicle technology must be user-friendly and efficient. For Alibaba, that means offering what are generally referred to as “mini apps” via its upcoming connected vehicle push that was announced at the auto show. Those apps reportedly are “smaller than regular ones in exchange for faster access and smaller file sizes, in Alibaba’s all-in-one digital wallet Alipay.” Alibaba, though, gave no specific scheduled about when it would roll-out those mini apps for connected vehicles, though an actual launch reportedly is in the works.

The connected vehicle ecosystem is speeding along, with new progress coming regularly, along with new partnerships, including tech firms forming or deepening their times with OEM automotive companies. That suggests the Alibaba launch might come sooner rather than later, but no matter what happens, this is a global trend that promises to lead to a new era of driving.

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