Alibaba to Sell Cars Via Vending Machines

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Alibaba to Sell Cars Via Vending Machines

By Donna Fuscaldo | August 3, 2017 — 11:41 AM EDT

Alibaba Group (BABA) is getting into the vending machine business, but they won’t be stocked with soda or bags of chips. Rather consumers in China will be able to purchase a brand new car.

Yu Wei, the general manager of the automotive division on Alibaba’s Tmall ecommerce platform told the Financial Times that as soon as next year users will be able to shop for new cars on their mobile devices and pick them up from a massive vertical vending machine. Wei said purchasing a car via the internet has arrived in the automotive industry and that its vending machine will make purchasing a car as easy as buying a can of Coke, reported the FT. With the service, consumers who have good credit from Alibaba’s Sesame Credit will be required to put 10% down for their new vehicle and make monthly payments via its Alipay digital payment service. (See also: Alibaba Pushes Dual Strategy With New Stores.)

Flashy Car Flash Sales

Consumers in China have are already comfortable with purchasing cars over the internet. The FT pointed to Maserati, which was able to sell 100 vehicles in only 18 seconds during a Tmall flash sale. Meanwhile, Alfa Romeo, the Italian car company ran a similar sale and sold 350 Giulia Milano cars in 33 second, reported the FT, citing data from Alibaba. For the last 10 years, China has been the largest auto market with car sales totaling 28 million in 2016. (See also: Alibaba Aims to Become World’s Fifth Largest Economy by 2036.)

The move on the part of Alibaba to sell cars via vending machine is part of its offline-online retail vision in which the new buzzword signifies the ability of mobile platforms to facilitate the interaction between traditional offline business and their customers online through mobile apps. The business strategy draws customers into the physical offline premises via online transactions and relies on big data to make that possible. Its ability to harness data to entice consumers to shop more has drawn interest from Wall Street, which has been growing increasingly bullish on the company.

In June, HSBC upped its price target on the company to $162 from $145 a share. In a research note to clients at the time, HSBC said the company is in the beginning stages of “data-driven growth.” The Wall Street firm has a buy rating on the stock. But Alibaba isn’t the only company that is relying on vending machines to sell new vehicles. Carvana, a startup out of Phoenix, offers a similar service in a couple of states in the U.S.

 

Published at Thu, 03 Aug 2017 15:41:00 +0000

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