Watch out, Amazon. Alibaba is partnering with more Western brands than ever before, looking to top-tier marketing partners to help its e-commerce efforts in areas such as automotive, streaming entertainment, apparel and better mesh e-commerce and physical retail on their home turf.
Ford and GM are among the auto brands participating in a consumer trial in China where auto shoppers can take vehicles for a three-day test-drive to decide if they want to buy.
The Alibaba Group is opening two “Super Test-Drive Centers” in Shanghai and Nanjing as a prelude to the “new retail” experience for customers launching in January with dozens of Tmall-branded giant auto vending machines (you can’t miss the cat logo) popping up in cities across China in 2018.
Chinese nationals with good credit scores can sign up and choose from 100 models from automakers including Ford, GM, Mercedes-Benz, BMW, Volvo and Audi.
The vending machine model lets consumers browse vehicles via their smartphones and purchase a in just five minutes, “as easy as buying a can of Coke,” said Brion Tingler, the New York-based head of external affairs for Alibaba Group.
“We are building a physical, experiential store that offers staffless car pickup through facial-recognition,” added Huan Lu, a marketing director of Alibaba’s marketplace handling automotive business.
Tests last year bode well. Alibaba has been experimenting with different brands and models. Last year Maserati sold 100 cars in 18 seconds, and Alfa Romeo followed with a flash sale in March that sold 350 Giulia Milano cars in 33 seconds.
A separate collaboration between Alibaba and Ford will result in 15 new electric or hybrid models exclusively for the China market by 2025 via Taobao marketplace and T-Mall for direct sales.
China is arguably the world’s largest market for electric vehicles and Tesla and VW are both making entry plans.
“China is one of the world’s largest and most dynamic digital markets, thriving on innovation with customers’ online and offline experiences converging rapidly. Collaborating with leading technology players builds on our vision for smart vehicles in a smart world to reimagine and revolutionize consumers’ mobility experiences,” said Jim Hackett, Ford President and CEO.
“When I think of where EVs are going, it’s clearly the case that China will lead the world in EV development,” Ford executive chairman William C. Ford Jr. commented on the electric vehicle outlook.
In another high-level partnership, Alibaba’s Taobao Mobile is powering an augmented reality experience at Starbucks’ new Roastery flagship in Shanghai, a mobile-first retail experience that brings the stunning new shrine to all things Starbucks to life.
On the entertainment front, Alibaba has spent billions including investing in Hollywood movies like Mission Impossible, buying into Amblin Partners, Steven Spielberg’s company and helping finance the latest installment of Universal’s “The Fate of the Furious,” which took in $393 million in China earlier this year.
Alibaba’s video streaming service, Youku Tudou, has signed content licensing deals with NBCUniversal and Sony Pictures Television, inking multiyear agreements to give Youku subscribers access to hundreds of films from the Hollywood studios, and faster access to new movies, including the recent Blade Runner 2049 and the upcoming Jumanji: Welcome to the Jungle.
Youku’s rival, Baidu Inc.’s iQiyi recently teamed with Netflix and Tencent Holdings Ltd.’s video service.
“I am confident that expanding our relationships with more international studios will further enhance our platform’s penetration into the home entertainment business and push the online video” and over-the-top businesses to greater heights, Yang Weidong, president of Youku, Alibaba Digital Media and Entertainment Group, told Bloomberg.
H&M Aims to Launch Tmall Store in Early 2018. #HM #fastfashion https://t.co/e1xhibTFSY pic.twitter.com/FDrXibCBLZ
— Alibaba Group (@AlibabaGroup) December 15, 2017
On the apparel front, Sweden’s global apparel powerhouse H&M is opening an official flagship store on Tmall in early 2018 to introduce items from its home-accessories sister brand H&M Home. Its street-style brand Monki has been on Tmall since 2016.
“We are very happy to be able to make H&M even more accessible in mainland China, stated Karl-Johan Persson, CEO of the H&M group. “Tmall is an important complement to our existing physical and digital stores. We see a great potential for substantial future growth and Tmall will be an important part of this.”
H&M opened its first store in mainland China 10 years ago and today’s group revenues in China amount to nearly $1.3 billion from more than 500 physical stores and online.
“As one of the world’s most innovative fashion companies, H&M is a perfect fit for Alibaba’s Tmall platform,” says Michael Evans, President of Alibaba Group. “We are honored to expand our cooperation with H&M and host their flagship store, enabling H&M brands to engage with our half a billion consumers.”
Alibaba is continuing to innovate and invest in omnichannel retail or “New Retail” as it calls it (and demonstrated around its 11.11 shopping spree), recently investing in Sun Retail, a national hypermarket operator, to bridge e-commerce and physical retailing. The two companies will also explore technology, including cloud computing for big data analysis and digital marketing services using Alibaba’s AliOS operating system.
Below, check out BCG retail analyst Angela Wang’s #BCGxTED talk below on how China is changing the future of retail:
China is a huge laboratory of innovation, says @BCG retail expert Angela Wang, and in this lab, everything takes place on people's phones. Watch here: https://t.co/FZlCm7KCqP #BCGatTED
— Alibaba Group (@AlibabaGroup) December 18, 2017
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