The Alibaba Group Holding Ltd (NYSE:BABA) has signed an agreement with Ford Motor Company (NYSE:F) to combine forces and jointly search for business opportunities including the cloud computing, retail, and connectivity which may include selling of Ford cars on the Alibaba’s online retail podium, Tmall.
The terms of agreement intend to explore the new strategies to redefine how the end users purchase and own vehicles. The e-commerce cooperation is basically a ‘pilot study’ for new retail opportunities and according to Alibaba, the digital marketing-focused Alimama and their operating system company AliOS are also among the subsidiaries that would work together with Ford for the three-year contract.
According to the latest news from Reuters, Ford is considering to enter into the agreement as it plans to penetrate the China markets as their new strategy to stimulate their business growth. The contract will focus on the consumer behaviors and how to control the digital distribution channels to explore new opportunities in the market.
Jim Hackett CEO at Ford stated that the collaboration with Alibaba a tech firm is building on its company vision which to make ‘Smart Vehicles’ to reimagine and revolutionize the consumer’s driving experiences. Ford’s sales volume in China has been moving at a slow pace in the recent months as they struggle to keep up with the rapidly changing trends on the market including the increasing demand for entry-level vehicles, especially in small towns and cities.
At the same time, Alibaba is trying to intensify its presence in the automotive industry with high-tech firms including the Banma Technologies, a joint venture of SAIC Motor Corporation Ltd which builds Internet-connected automobiles. Hackett stated that China is one of the world’s largest and most vibrant digital markets that are prosperous in the innovation of user’s online and offline experiences swiftly.
Other competitive firms including General Motors, Volkswagen, Tesla, and Daimler are also planning to invest in the Chinese market in the near future.