This is a new weekly-ish column from the editorial staff that will cover current events from a direct perspective based on our team's expertise in travel, hospitality, and technology.
As I was getting ready for the ITB China press preview late last month in Shanghai, a segment played on the country's government-run broadcaster China Global Television Network. Aside from the strong production values and surprisingly serious journalism, it was the subject of the segment that got me thinking about China's role in pushing e-commerce further than any country in the world's history.
The segment was all about Chinese e-commerce giant Alibaba's latest project: a car-vending machine for test driving cars.
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CGTN file photo of the Ford-branded vending machine.[/caption]
While the actual 'car vending machine' idea isn't new, what struck me were two key points: 1) access was controlled through Alibaba's own credit system, and 2) it was all done through existing mobile channels.
It's kind of hard to believe how quickly China has moved its payments from cash to digital. Within a few years, it went from a country where you needed cash to a country where you need a mobile phone to pay using QR codes; it skipped the credit card phase completely. This shift was driven by the launch of platform-specific payment systems, like WeChat Pay and Alipay.
Alibaba's Alipay quickly became dominant, as the company was able to use its payments arm to facilitate transactions between sellers and buyers, holding cash in escrow. This rapid scale gave it insight into the spending patterns of Chinese consumers (and Chinese travelers abroad). This data could then be used to judge the creditworthiness of an individual, much in the same way a credit bureau receives information about consumers from many parties.
Having a private, closed credit ecosystem is impressive. It's really something that's unique to China, and I never really understood how deeply Alibaba had rooted itself into the financial fabric of the country. So that was the first notable revelation from the car-vending machine.
The second was how Alibaba managed the access to the cars via mobile only. Users had their credit checked, and were only granted access to the machine upon approval. This was all done via mobile phones -- no dealer visit or third-party credit check required. It's a quick process and then access to a test drive. While the final transaction must be completed at a dealer, it's very much a mobile product.
Alibaba sits on a trove of data, something the company is never shy about touting. As Alibaba Marketing Director Lu Huan told CGTN, this data-driven approach is how the company continues to drive headlong into mobile-enabled, data-driven digital commerce:
We at Alibaba are trying to empower the traditional business, especially the car industry, with our 600 million users and the big data generated on our platform. We have the data of 80 million potential customers and 120 million car owners. Thus we can provides a complete, integrated set of infrastructure plans for the auto brands to better use their national network of dealerships.”
This is another example of brick-and-mortar meets e-commerce, a Chinese speciality that is becoming a case study in forging deeper connections between the online and offline. There really is nothing like it anywhere else in the world.