Luxury auto brand Alfa Romeo on Tuesday forged an exclusive strategic partnership with Alibaba’s Tmall to market and sell its cars online in China.
The two sides said at a press conference in Hangzhou that Tmall will serve as the sole authorized Internet channel for the Italian car brand owned by Fiat Chrysler Automobiles (FCA) inside China. Tmall is China’s largest B2C online commerce platform. They spoke just before Alfa Romeo debuted on Tmall, selling out all of the 350 Giulia Milano car models it offered in 33 seconds during the “Tmall Super Brand Day,” an online marketing promotion held by the Alibaba unit.
Alfa Romeo isn’t new to China. It tested the waters here years ago and announced its return to the country last year.
The new partnership follows the success last year of Alfa Romeo’s sister brand, Maserati, on Tmall, which is also owned by FCA. Maserati opened its flagship store on Tmall on the same day last year and sold out its allotment of 100 Levante SUVs in a mere 18 seconds.
“I am very pleased to announce that Alfa Romeo has entered into a strategic partnership with Alibaba group, which allows us to better express our brand values to the Chinese consumers. Our collaboration with Tmall is helping the brand make our journey in China faster and more efficient,” said Mirko Bordiga, managing director of Alfa Romeo China, at the signing ceremony.
That luxury vehicle brands are a hit online is no surprise. In a recent report from L2, the consultancy noted that luxury automakers are increasingly taking to the Internet to reach China’s affluent and digitally active consumers as a way to reduce their reliance on conventional auto dealerships to drive sales in the country.
The report said China, already the world’s largest car market, is projected to become the top market for luxury vehicles by 2020. As competition ratchets up, premium automakers “will realize dividends from forward-looking e-commerce investments.”
“Chinese auto buyers are using digital technology at all steps in the purchase process. A majority of Chinese buyers already know what model they want before visiting a dealership, and online research is a key influence factor,” according to the L2 report.
Tmall said it can help Alfa Romeo identify and engage potential young customers on its platform and raise the brand’s awareness in China.
“Tmall has become not only an online sales channel, but also a platform that allows brands to build up profile, establish customer relationships, and operate business in a digital way based on data insights” said Jet Jing, Vice President of Alibaba Group.
To celebrate its grand launch, Alfa Romeo offered the limited-edition Giulia Milano models at RMB 433,800 (USD 62,900) each to a first batch of Chinese consumers. Before the sale, Tmall recorded 20,000 searches for the Alfa Romeo model. Alfa Romeo then added another 60 Giulia QV models for RMB 1,028,000 (USD 149,000) each.
Alfa Romeo said it will roll out more car models on Tmall and will use Maserati’s 45 dealerships in China to operate the offline part of its business. Consumers who place deposits online can redeem e-coupons and pick up the cars in physical outlets. Alibaba said it crafted this kind of online-to-offline business model to connect car brands, offline distributors and after-sales service providers and offer a seamless online shopping experience for customers.
In 2016 alone, over 30 vehicle brands, including Maserati, Audi, Mercedes-Benz and Volvo launched new car sales on Tmall. During the 2016 11.11 online shopping extravaganza last year, Alibaba said some 100,000 cars from foreign and domestic manufacturers were sold on its Tmall and Taobao shopping websites.