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, 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 8,000 car dealerships took part in the event and more than 50,000 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 30,0000 tires during the Singles Day event; these are some serious numbers.
To add, 1,200 independent repair shops across 250 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.
Alibaba, with clout and money, could buy several connected car players and create a truly connected platform with multiple apps, services and, most importantly, shift the focus from a niche Carplay-type offer to a much broader connected platform over the vehicle life cycle.
The collaboration between Internet Giant Baidu and BMW to develop autonomous technology is an interesting indication of the future. Is this a sign of white labeling of automotives to reach more people? The Internet car in development includes Alibaba's YunOS (Android based) operating system with connection to Alibaba cloud computing services, navigation solutions (AutoNavi) and other Alibaba applications.This vehicle could revolutionize the whole life cycle of the car and user experience.
Alibaba is also plotting beyond just connected cars. It is also thinking about new mobility business models and an enhanced mobility strategy, turning the vehicle into an extended ecosystem that connects door-to-door and multi-modal journeys. Alibaba has launched its new independent travel site, Alitrip. This division plans to host 10,000 merchants and already has signed agreements with Cathay Pacific Airways and hotel booking site Agoda.com. This online travel scene is hotly contested by Alibaba, Tencent and Baidu. Frost & Sullivan believes Alibaba will leverage its connected car, eCommerce platforms and future investments like Alitrip to create integrated journey platforms.
The Alibaba juggernaut is here; move aside Google and Apple. At a time when Google's real threat is Amazon and the two companies are fighting it out over conquering the cloud (Amazon may have just won this), Alibaba is quietly creeping up to cover the space with many different strategies, including its obvious play for the connected car. With more than $1.4 trillion at stake, the game is truly on.
This article was written with contributions from Niranjan Thiyagrajan and Praveen Chandrasekar, senior members of Frost & Sullivan's global Automotive & Transportation practice.
Source : http://www.forbes.com/sites/sarwantsingh/2014/12/02/move-aside-apple-and-google-alibaba-is-entering-the-connected-car-space/
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