Just around the time when eCommerce in India is loosing its grip with valuation markdowns, Alibaba – China’s largest eCommerce company, is here to keep the market hot. According to the reports from ET, Alibaba planning to expand its operations and enter India this year.
The report further states that Alibaba Group’s president – Michael Evans and global managing director K Guru Gowrappan met with Communications and IT minister Ravi Shankar Prasad on Friday to talk about the company’s interest in the Indian market.
This news comes at a time when China’s economy, which is the second largest in the world, is facing a slowdown. At this time, Indian e-commerce (and the Indian economy as a whole) is an attractive market, and Alibaba is big enough to make impact event if its late to enter the market.
A senior government official who is aware of the matter said that the company is very keen to make a grand entry in India and exploring thir options of whether to start on their own or partner with others to set up store.
After meeting with the executives of Alibaba, Ravi Prasad said:
Ecommerce is a rising phenomenon in India, growing at 50% plus, with a huge catchment area, which shows the potential of a big aspirational market. We will give them (Alibaba) full cooperation. They’re most welcome to adopt the same (online and offline) strategy in India, too. They can look at setting up their own (delivery platforms) or use the time and tested postal service.
All this comes at a time, when last week, Alibaba closed a $3 billion loan. While the company didn’t reveal where it will spend that much money, the most obvious use for the company seems that it will invest in eCommerce and media startups, as well as for setting up its unit in India.
If it does enter the Indian market, Alibaba will prove to be a tough competitor for all three major eCommerce players in India – Flipkart, Amazon and Snapdeal. They will have to come up with new strategies to stay at the top as market leaders, akrgeky because of the massive war chest Alibaba has under its possession.
Alibaba has been actively investing in the Indian startups since quite some time. However, the company is planning to establish its presence through its own eCommerce store, for which, the company is known globally.
According to a report from Assocham, eCommerce market in India is likely to be worth $38 billion by the end of 2016, a 67% jump from a year ago and a 10-fold jump since 2009. It further suggested that revenue will grow five-fold to seven-fold during this period.
Alibaba however, already has a sort of indirect presence in the Indian market. The Chinese behemoth has already invested in two of the biggest Indian ecommerce startups — PayTM and Snapdeal. It owns majority stake in PayTM, which is claimed to be the largest mobile commerce platform in India. It also owns a minority stake in Snapdeal.
Recently, it was reported that India’s largest eCommerce platform – Flipkart is in talks with Alibaba to raised around $1.4 billion in a new funding round. However, the deal has not been closed yet.
It will be interesting to see if the company opts to set up its own store or partner with the company it has already invested in. Earlier, it was reported that PayTM will list products from more than 100,000 sellers of Aliexpress on its platform.