Alibaba will be selling and offering financing for General Motors cars through its eCommerce sites, and using its data-crunching capabilities to target Chinese buyers for GM, Reuters reported on Friday (April 17).
Chevrolet, Buick and Cadillac automobiles are already sold on Alibaba’s Tmall online marketplace, along with dozens of other car brands offered by 10,000 car dealerships. But under the new deal with Shanghai GM, Alibaba will also offer loans to car buyers, offer after-market services, and use its big-data capabilities to target ads at potential GM car buyers.
The idea of Alibaba becoming a preferred source for car loans for the world’s third-largest automaker isn’t really a surprise. The eCommerce giant dominates eCommerce payments in China through its Alipay affiliate, has its own money-market fund with almost 200 million investors, and in January launched its own credit-scoring service called Sesame, basing scores on data from Alibaba’s eCommerce marketplaces. Last week Alibaba even announced a minor reorganization to bring all its automobile-related operations into a single automotive business unit.
But the Alibaba-GM partnership also comes close on the heels of Alibaba’s announcement that SAIC, China’s largest automaker by volume, will invest $160 million in a fund to jointly develop an Internet-connected car with Alibaba, with a target date of August 2016 to rollout a production model — a car consumers can actually buy — rather than a so-called “concept car” that could take years to be ready to sell.
Alibaba may not seem to have much of a place in an actual car-building partnership, but it does own car-navigation system company AutoNavi, which Alibaba acquired in 2012 for $1.5 billion after its rival Baidu got into the mapping-and-navigation business in China, according to SeekingAlpha.
Getting into the automobile business as a major player (instead of as just a third-party supplier) would also fit in with Alibaba’s online-to-offline (O2O) efforts to push its services into the physical world in areas like food delivery and movie ticket sales. A report by the government-run China Internet Network Information Center said 39.2 percent of consumers in large Chinese cities used O2O services last year.