E-vend­ing ma­chines for cars com­ing

Alibaba plans to roll out al­ter­na­tive auto sales chan­nel be­fore year-end

China Daily (Hong Kong) - - FRONT PAGE - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

Imag­ine an on­line vend­ing ma­chine where you can buy the lat­est model from Audi, Mercedes-Benz or Maserati.

Later this year, it will be­come a re­al­ity as e-com­merce gi­ant Alibaba Group Hold­ing Ltd takes con­sumerism to the next level. Car pur­chases will be as easy as buy­ing a can of coke.

“We plan to launch this ser­vice in China be­fore the end of 2017,” said Yu Wei, gen­eral manger of the auto di­vi­sion of busi­ness-to-cus­tomer site Tmall, which is part of Alibaba.

While lo­ca­tions have yet to be an­nounced, cus­tomers will be able to turn up at a mul­ti­story e-show­room, browse through hun­dreds of cars on­line, pay for their pur­chases and wait for them to be de­liv­ered in the blink of an eye.

This will cut down de­liv­ery times and her­ald a brand­new con­cept in “big item” shop­ping.

Last De­cem­ber, Sin­ga­porean car dealer Au­to­bahn Mo­tors set up a fu­tur­is­tic 15-story show­room and touted it as the world’s largest lux­ury car “vend­ing ma­chine” in the city state.

Sim­i­lar busi­ness ven­tures have sprouted up in the United States and Ja­pan.

But Alibaba is plug­ging its new auto re­tail op­er­a­tion into its on­line-to-off­line ecosys­tem and ex­pects to mine cru­cial con­sumer data gen­er­ated by in­di­vid­ual sales.

Part of this in­volves the group’s Sesame Credit rat­ing pro­gram.

Con­sumers, who have a credit score of 750, can put down a 10 per­cent pay­ment on a car and pay the rest off in monthly in­stall­ments through Ali­pay, which is also part of Alibaba.

Sesame Credit’s rat­ing sys­tem for con­sumers starts at 0 and goes up to 900.

“Chi­nese cus­tomers have em­braced buy­ing big-ticket items on­line be­cause it cir­cum­vents hours spent at a phys­i­cal deal­er­ship ne­go­ti­at­ing with sales staff,” said Qi Xiaozhai, a se­nior busi­ness con­sul­tant for the Shang­hai Mu­nic­i­pal Com­mis­sion of Com­merce. “It has made pri- ces trans­par­ent and trace­able.”

More than half of the lux­ury car brands have es­tab­lished a foothold on Tmall, ac­cord­ing to a Fe­bru­ary re­port by L2, a con­sul­tancy spe­cial­iz­ing in eval­u­at­ing the dig­i­tal per­for­mances of com­pa­nies.

Maserati joined Tmall in or­der to reach cus­tomers in lower-tier Chi­nese cities, where the brand is not avail­able at bricks-and-mor­tar show­rooms. Sales have been brisk although de­tailed fi­nan­cial fig­ures have yet to be re­leased.

Last month, new car su­per­mar­kets started open­ing up, backed by home ap­pli­ance chains such as Sun­ing Hold­ings Group Co Ltd.

Their de­ci­sion fol­lowed rad­i­cal changes in the reg­u­la­tions gov­ern­ing car sales, which opened up the mar­ket on July 1.

But Zhang Xiaodong, se­nior man­ager at J.D. Power’s Au­to­mo­tive Re­tail Con­sult­ing in China, felt long-es­tab­lished show­rooms, deal­er­ships and garages would be dif­fi­cult to dis­lodge.

“To avoid be­ing a flash in the pan, they should fully lever­age ge­o­graph­i­cal con­ve­nience, com­pet­i­tive pric­ing and in­ter­net tech­nolo­gies to build and main­tain cus­tomer loy­alty,” he said.

“They will have to do this in or­der to chal­lenge long-es­tab­lished deal­er­ship mod­els that have ex­ten­sive sales net­works and ma­ture ser­vice sys­tems,” he added.

We plan to launch this ser­vice in China be­fore the end of 2017.”

Yu Wei, gen­eral manger of the auto di­vi­sion of Tmall

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