Alibaba moves into automotive aftermarket in competition with Didi

Following Didi’s recent move to invest US$1 billion to launch an auto services platform, Alibaba’s Tmall reportedly is setting up a JV with China’s Jingu Group, one of the largest and local listed aft

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Following Didi’s recent move to invest US$1 billion to launch an auto services platform, Alibaba’s Tmall reportedly is setting up a JV with China’s Jingu Group, one of the largest and local listed aftermarket service providers, to target a growing automotive aftermarket in China.

Both Alibaba and Jingu will be major shareholders, in addition to other investors including Warburg Pincus, YF Capital, and Pacific Alliance Group amongst others.

This newly formed company boasts of a supply chain system to meet the car maintaining needs of car owners, ranging from fuel, tyres to batteries through Jingu’s more than 80,000 chain stores across China.

Takeaways

– China’s car aftermarket has reached RMB 1.3 trillion at an annual growth rate of 34.6% as of end-2017

– This lucrative market has attracted major players like Didi and Alibaba moving in to vie for a slice of the market.

– The current consolidation wave could lead to a maturing market, where only the bigger players can survive amidst intensifying competition.

Editor: Ben Jiang