China e-commerce giant Alibaba has set its sights on the connected car market, but its ambitions lie far beyond mere in-car apps and simple navigation and entertainment via a tethered smartphone.

Its long-term goal is a platform able to run autonomous vehicles, making use of predictive analytics via the cloud for real-time monitoring and control.

The company announced in July it is partnering with SAIC Motors to develop an internet-enabled car within two years. Cars built by SAIC would be powered by Alibaba’s Yun operating system, Autonavi GSP and its Aliyun cloud computing service.

A truly networked car will require an integrated system that enables vehicles to communicate with each other, the road, traffic signals, pedestrians as well as various authorities.

Alibaba, flush with cash from its September IPO in the US that raised $25 billion, looks certain to follow in Google’s footsteps and throw its weight around to acquire the necessary components to deliver on its two-year target of producing an ‘internet car’.

Forbes reported this week that the balance of power in the connected car market is moving from a focus on business-to-consumer revenue generation through software licensing, ads and value-added services to a longer-term revenue generation strategy aimed at the business-to-business (B2B) sector. Like in other markets, the company would work closely with OEMs to deliver features at all levels in the value chain.

The company’s retail and e-commerce reach puts it in a great position to leverage its vast database of customer behaviour analysis to develop a connected car platform that covers everything from navigation and entertainment to telematics and safety conditions.

But Alibaba certainly isn’t alone. Baidu announced in September it is working with Germany’s BMW to run semi-autonomous driving trials in Beijing and Shanghai. BMW is tapping Baidu for its high-resolution maps to support the cars’ precise navigation.

Baidu’s in-car system CarNet provides location-based services on mobile devices through Baidu Maps.

Outside of China, Volvo announced last month its Drive Me project in Gothenburg in Sweden aims to have 100 autonomous vehicles on the roads by 2017.

Apple is teaming up with BMW, Mercedes-Benz and Ferrari to offer an in-car networking and multimedia platform called CarPlay. Meanwhile, Google’s Android Auto is offered by 28 carmakers, including Audi, Hyundai, Ford and Nissan.