Chinese e-commerce company Alibaba is looking to expand online automotive sales in response to slowing sales in major cities.
Their rural strategy in 2014 was first hatched in 2014 by bringing their online shopping service Taobao.com to remote areas. This resulted in rising internet penetration and use of mobile devices. Rural residents became more accustomed to shopping online, making them the perfect market for online auto sale expansion.
The potential is also reflected in the buying frenzy that took place on Singles Day 2016. Every year on November 11, single people in China buy themselves a gift in celebration of their solo status. One local from the Sanfeng village, in Xinchang county of Zhejiang province spent 400,000 yuan (US $53,483.00) to buy a BMW car. Rural residents are looking to spend big.
Since partnering with Chinese dealership group Harmony a year ago, Alibaba’s automotive unit has expanded its physical car services network Car Port.
Wang Licheng, general manager of Alibaba’s automotive division told South China Morning Post he company plans to more than double the number of Car Port outlets to 3,000 early next year and further increase to 20,000 in 2018 covering 28,000 towns, counties and villages.
“While moving to the next stage, we want car sales services available through the Car Port network. Rural residents can order cars directly online, and the cars will be sent to Car Port’s outlet,” he said.