Alibaba Group’s subsidiary Ant Financial will provide $7.3 billion to provide financial assistance to delivery drivers participating in Cainiao Network’s partnership with carmakers SAIC Motor and Dongfeng Motor, the company announced yesterday.
Additionally, Cainiao will work with partners, including Alibaba affiliate Ant Financial “to provide financial support of $7.3 billion for logistics firms and delivery drivers participating in the plan,” according to parent company Alibaba Group.
If Ant Financial is, in fact, offering financing options to drivers of these electric vehicles, this could indicate a strong cultural shift of how Chinese feel about taking out loans to buy vehicles. Traditionally, Chinese avoid taking out loans to buy cars, instead opting to use cash, according to a 2015 study conducted by Deloitte Consulting. In comparison, more than 80% of cars are financed in the United States. However, Deloitte expects 50% of cars to be financed in China by 2020 as automakers aggressively push financing to increase sales. Chinese consumers finance about 27% of cars as of 2015, according to the study.
Since Alibaba is the largest e-commerce website in China, with a market cap of $305 billion, it appears positioned to direct consumer preferences and purchase behavior. But this is also not Alibaba’s first foray into the automotive industry; the e-commerce company previously partnered with SAIC Motor in 2015 to invest a combined $160 million in connected car technology, according to a published report.
Alibaba Group and Ant Financial did not respond to requests for comment.
