Chinese e-commerce giant Alibaba (NYSE: BABA) has formed a strategic cooperation with automaker SAIC Motor in the so-called automobile new retail sector on Monday, amid the industry’s recovery following the COVID-19 pandemic, 36Kr reported.
Under the new retail cooperation, which combines online and offline sales, users of Alibaba’s e-commerce platforms, Tmall and Taobao, can enjoy rebates after they visit brick-and-mortar stores and purchase a vehicle that falls under the deal, which includes models from Volkswagen, Buick, Chevrolet, and Cadillac. The rebate, ranging from RMB 1,111 (USD 169) to RMB 10,000 (USD 1,500), comes as a coupon which can be used to pay for other goods on Taobao or Tmall.
This cooperation comes as SAIC Motors has been witnessing a recovery in sales following a hard blow from the COVID-19 pandemic, and as Alibaba is expanding to include large-ticket items on its platform, used by 757 million active customers.
SAIC Motors sold 231,455 vehicles in the first three months of this year, down by 55.71% year-on-year (YoY), according to data released by the company. But sales have been gradually picking up as the pandemic has been controlled in the country in the second quarter. SAIC’s single month sales have surpassed that in last year as of June so that the company’s entire sales decline has narrowed to 15% YoY by the end of October. The automaker sold 596,719 vehicles in October, compared with 544,319 units in the same month last year.
Overall, auto sales in China have posted growth for six months in a row, according to data released by China Association of Automobile Manufacturers. A total of 256.6 million vehicles were sold in September, up 12.8% YoY.
Alibaba has been featuring large-tickets items such as apartment and cars in its extended 11.11 global shopping festival, which includes November 1 to 3 and November 11. Tmall is also offering discounts for other car models made by companies including Xpeng and WM Motors.
Alibaba’s close challenger Pinduoduo has occasionally sold vehicles made by companies including Wuling, Tesla, and Cadillac. But vehicles on Pinduoduo are mainly provided by small distributors and sometimes gain backlash from brand owners. Tesla once denied involvement in a Model 3 promotion on Pinduoduo, in a move to protect its brand image and maintain control over pricing.