Alibaba leads $335mn investment in Chinese online car sales start-up

Chinese e-commerce giant Alibaba has led a $335mn investment in a Chinese online car sales start-up.

The start-up, SouChe, is based in Hangzhou and offers digital sales solutions to brick-and-mortar car dealers across China, which is the biggest automobile market in the world.

SouChe was founded in 2012 and already has 110,000 offline dealers registered as clients – this amounts to almost two-thirds of dealerships in the country. 

The firm embraces “new retail” in a combination of online, offline, logistics and dats across a single value-chain.

It affords car dealers the opportunity to manage offline inventory and keep track pf potential buyers, in addition to online marketing.

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Although the amount Alibaba has invested was not disclosed, it will be the biggest investor in SouChe in its step to break into the automobile industry and blend online and offline retail.

Other investors include Warburg Pincus, Primavera Capital and CMB International.

This will be the fifth funding round for SouChe, which has raised a total of $635.4mn.

According to the South China Morning Post, which is owned by Alibaba, the founder and chief executive of SouChe, Yao Junhong has stated: “Pure e-commerce is not going to be the best solution for car sales in China… people want to go to a store to see, touch and try out a car before they place an order. Not to mention all kinds of after-sales services that can only be provided in brick-and-mortar stores.”

Yao is confident that not only will Alibaba’s investment help financially, but the relationship will benefit car dealers (and SouChe) greatly. “By teaming up with Alibaba, which is the dominant player in e-commerce, we can bring our offline dealers the best traffic to boost their online presence and further expand our offline retail. Together, we can build a seamless new automobile retail platform which is expected to improve efficiency for car sales by taking full advantage of the internet and big data.”