Tmall.com, the business-to-consumer platform owned by Alibaba Group Holding Ltd, rolled out a financing service on Wednesday to help car purchasers in China get unsecured loans of up to 60,000 yuan ($9,606).
The new service underscored the Hangzhou-based e-commerce conglomerate's strong ambition to conquer a new sector - the online car market.
Tmall has gained fame mainly through the sales of clothes and shoes online.
"China is the world's largest car market with a total sales of more than 20 million units last year. The number of cars sold through online platforms is quite small compared with the giant size of the market," said Wang Licheng, a senior executive of Tmall, which allows brands to sell directly to customers.
Vehicle shoppers can apply for interest-free loans that allow them to pay off their balances over as long as 18 months, depending on their shopping records and creditworthiness on Tmall and Taobao, Alibaba's online marketplace.
Participating automakers include Shanghai General Motors , which operates Tmall.com flagship stores for the Chevrolet and Buick brands, and SAIC Motor Corp Ltd, formerly Shanghai Automotive Industry Corp.
The program is the latest move by Alibaba to leverage its strengths in data and finance to tap into new markets. On Tuesday, Alibaba introduced a program that provides loans to small and medium-sized enterprises in China.
The car loan program is run by the Small and Micro Financial Services Group, a company spun out of Alibaba Group that includes Alipay . It operates the popular Yu'ebao money market fund. Rather than funding the loans itself, Small and Micro Financial Services acts as an intermediary to verify the creditworthiness of loan applicants.
During a promotion from July 25 to Aug 11 last year, 17 vehicle brands with Tmall.com storefronts sold 3,400 cars valued at 80 million yuan through the website.
However, most of the online vehicle transactions do not really qualify as pure e-commerce, because the buyers generally make down payments online, then go to physical locations to make the remaining payments, said Pan Wei, analyst with the Beijing -based Internet consultancy Analysys International.
There are many online platforms that aim to build automobile e-commerce "empires", but most merely serve as online media outlets that feed vehicle-related information to potential buyers, said Pan.
Autohome Inc, a leading online portal for vehicle information, formed a strategic partnership with JD .com, Alibaba's largest competito r in China, in June to develop automobile e-commerce and to facilitate real transactions online.
Pan said that Alibaba enjoys a strong advantage in automobile e-commerce as it has integrated financing service on its online platform.
"But the move doesn't guarantee a promising future as most people still aren't used to buying high-priced items such as cars online," he said, adding that it will take a lot of time for consumers to form this habit and for online retailer s to create new methods to increase user loyalty.
SAIC signs deal on Internet technologies with Alibaba
Shanghai-based automaker SAIC Motor Corp Wednesday signed an agreement with Internet giant Alibaba Group on applying more Internet technologies to SAIC's future products, news portal tech.sina.com.cn reported.
The cooperation will enable SAIC to use Alibaba's "YunOS" operating system as well as its mapping and music services in the automaker's future products, according to the report.
Prior to the Wednesday deal, SAIC has already made efforts to bring the Internet to its vehicles.
SAIC in 2010 developed a vehicle system called inkaNet that enables car owners to get access to vehicle information on both personal computers and smartphones.
The system has reportedly been applied to most models of the company's self-developed Roewe brand.
Major carmakers and Internet companies have all been trying to tap into the opportunities in the development of "Internet of Vehicles," a concept that generally means making driving more intelligent using Internet technology.
Leading wireless operator China Unicom has cooperated with major domestic carmakers such as Zhejiang Geely Holding Group to provide 3G telecommunication services to their products.
China Unicom also signed a similar agreement with US premium carmaker Tesla in April.
"There will be more cooperation between Internet companies and automakers in the future as 'Internet of Vehicles' represents the future trend," independent auto analyst Zhang Zhiyong told the Global Times Wednesday.
Zhang also noted that "Internet of vehicles" means great opportunities for domestic carmakers and Internet firms.
