Alibaba's Executive Chairman Jack Ma takes a test ride on OS' Car, its internet-enabled vehicle jointly developed with SAIC Motor Corp on July 6, 2016 in Hangzhou, Zhejiang province. [Photo/China Daily]

"With the installed operating system, Alibaba is likely to introduce more features, such as streaming videos and online shopping, in the future generations of its smart vehicles," said Yan.

However, he doubts that cars can replace smartphones as a key internet device. "After all, people don't spend that much time in cars, only when they need to commute."