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Alibaba (BABA) stock is rising on the news of its “innovation base” in partnership with BMW. The companies are working to support tech startups in China.German automaker, BMW AG (ETR: BMW), has partnered with Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE: BABA) to set up an “innovation base” in Shanghai. The joint venture seeks to promote tech startups in China.BMW and Alibaba have come together to support and explore Chinese tech startups. The alliance between these two companies will be a huge advantage to many growing tech companies that focus on the internet and cars.Chinese Startups to Benefit from PartnershipThe two companies will combine their areas of expertise to provide consultation services and technical training. In addition to this, there would be a provision of
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Alibaba (BABA) stock is rising on the news of its “innovation base” in partnership with BMW. The companies are working to support tech startups in China.
German automaker, BMW AG (ETR: BMW), has partnered with Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE: BABA) to set up an “innovation base” in Shanghai. The joint venture seeks to promote tech startups in China.
BMW and Alibaba have come together to support and explore Chinese tech startups. The alliance between these two companies will be a huge advantage to many growing tech companies that focus on the internet and cars.
Chinese Startups to Benefit from Partnership
The two companies will combine their areas of expertise to provide consultation services and technical training. In addition to this, there would be a provision of office spaces to over 25 companies. According to the president and CEO of BMW Group Region China, Jochen Goller, collaboration is an important ingredient for scalability. He said:
“In the midst of industrial upgrading and transformation, we need to keep an open mind and to collaborate with outstanding Chinese innovation powerhouses in order to scale new technologies for future mobility.”
According to a recent report by China Daily, the two companies are touting direct support for several enterprises. The report says that in its first three years of operation, the partnership will support a minimum of 300 enterprises in diverse ways. The support will be in the form of digitization, future automotive technologies, and other technology-related issues, including cloud computing. The innovative base would also foster tech startups that focus on internet-based automotive services. Amongst other things, the partnership will also be assisting 20 startups in providing financial docking services.
Announcing the new development, the vice –president of Alibaba, Ren Geng added:
“The base’s establishment underscores the innovative forces driving future mobility. With the joint efforts of our partners, we are offering an open innovation incubation ecosystem to accelerate the growth of the startups.”
Individual Benefits of BMW and Alibaba Alliance
In response to the announcement, Alibaba stock rose by 2%. Now trading over 7% from its previous close, Alibaba has increased by 10.46% in the last five days. The company’s year-to-date and 12- month gains are up 13.05% and 38.36% respectively.
Presently, the biggest market for BMW globally is China. The automotive company has recorded a 13.1% increase in year-over-year sales in China. This figure represents the best one-year result since its entrance into the Chinese market in 1994. In the last five days, Alibaba has increased by 10.46%, also pulling in 13.04% in year-to-date gains.
The partnership between BMW and Alibaba has been growing over the years. The partnership started in 2018 when BMW introduced Alibaba’s voice assistant, Tmall Genie. In the same year, Alibaba also partnered with Ford to launch a car vending machine.
In addition to the productive alliance between the two companies, BMW has established three research and development centers in China. This makes China home to BMW’s largest facility.
Furthermore, Groller recently announced that “BMW also aims to enable the shift from ‘Made in China’ to ‘Innovated in China.’” He declared China as the company’s largest single market and the most important manufacturing base BMW has.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.