Alibaba Wants to Sell Cars in Large Vending Machines

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【Summary】The e-commerce giant is in the process of opening two portable showrooms in China (Shanghai and Nanjing).

  Michael Cheng  ·  Dec 21, 2017 10:00 AM PT
author: Michael Cheng   

Alibaba is a major disrupter of traditional markets. The tech brand is widely known for adopting emerging technologies, such as facial recognition, and incorporating them into everyday services for consumers. 

In the automotive sector, the China-based company wants to change the way businesses sell cars. Earlier this month, Alibaba revealed plans to sell vehicles in large vending machines. This lean selling approach utilizes a small space, roughly the size of a shipping container. Two stores are expected to open at the start of 2018.

"Our thinking behind the Car Vending Machine is focused on helping users solve certain problems they face in the car-buying process," Huan Lu, marketing director of Tmall's automotive division (operated in China by Alibaba), said in a statement.

So far, vending machine showrooms can be found in Singapore, courtesy of Autobahn Motors, and Germany.

Portable, Low-Cost Showrooms

The car vending machines are designed to promote test drives for various cars, for a period of three days. To get started, individuals must select a vehicle for testing on the official Taobao app. After filling out the necessary information and passing the verification process (more on this later), the customer simply takes a selfie and finalizes a schedule for the test drive.

The selfie is used for identity verification via facial recognition at the store. During the test drive, people can purchase the car directly from the Taobao app or select a different model to try out.

"To do that, we are building a physical, experiential store that offers staffless car pickup through facial-recognition, three-day 'deep' test drives and a one-stop shop that displays [cars from] all mainstream brands at once," said Lu.

The e-commerce giant is in the process of opening two portable showrooms in China (Shanghai and Nanjing). According to the company, local residents should expect roughly 12 more new compact stores to open across China in 2018.

Risks surrounding unmanned test drives and purchases will be managed by Alibaba's proprietary credit and consumer scoring schemes. Furthermore, individuals are limited to participating in five test drives every two months.

Free test drives are available for Alibaba Super Members (the highest tier in the Alibaba 88 Membership system), as well as people with reliable financial histories on the Zhima credit-scoring service. A score over 700 is required for consideration, supplemented with a 10 percent down payment.  

Ford and Alibaba?

Around the same time Alibaba announced the opening of new car vending machines, the business signed a partnership deal with Ford. The deal explores the possibility of selling Ford vehicles at local stores and websites. A Letter of Intent was signed by both parties, which includes a three-year opportunity to collaborate on cloud computing, connected car services and retail strategies.

Interestingly, local residents may see Ford vehicles inside the vending machines in the near future. The deal also expands on offering maintenance services for purchased cars.

"China is one of the world's largest and most dynamic digital markets, thriving on innovation with customers' online and offline experiences converging rapidly," said Ford CEO Jim Hackett.

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