Alibaba doubles down on car industry to drive its ‘new retail’ strategy
The e-commerce giant led a US$335 million funding round in a start-up that is working to blend online and offline car sales in China
Chinese e-commerce giant Alibaba Group has set its sights on the automobile industry in its latest move to revamp the entire retail landscape by blending online and offline shopping.
The New York-listed company has led a US$335 million funding round in a Chinese start-up that provides digital sales solutions to brick-and-mortar car dealers in the world’s largest auto market.
Pure e-commerce is not going to be the best solution for car sales in China. People want to go to a store to see, touch and try out a car before they place an order
With its capital injection – whose size has not been revealed – Alibaba becomes the biggest institutional investor in SouChe, the Hangzhou-based start-up said on Wednesday when it announced the funding round. Warburg Pincus, Primavera Capital and CMB International also participated in the round.
“Pure e-commerce is not going to be the best solution for car sales in China,” said Yao Junhong, founder and chief executive of SouChe. “People want to go to a store to see, touch and try out a car before they place an order. Not to mention all kinds of after-sales services that can only be provided in brick-and-mortar stores.”
Venture-capital investment has been pouring into the online vehicle-sales industry in China, with Guazi.com, one of the major internet car dealers announcing US$180 million of new funding on Tuesday.