India’s e-commerce market is one of the most lucrative ones around. With a tremendous scope of growth and a whole plethora of opportunities, the rapidly developing market has become a favorite of global players. And there are a lot of those. However, the main battle is likely to take place between Alibaba and Amazon.
At least that is what Vijay Shekhar Sharma, CEO of PayTM — a company that is backed by the Chinese Internet mammoth, Alibaba — believes will happen soon, with the time that will firmly establish the supremacy of one over the other, right around the corner.
The e-commerce business and market is reaching maturity of players. The next 6-9 months, it will be decided who the key contenders of the business are. Logically, to fight Amazon, you need the might of a strategic player – that is why it makes a lot of sense for people to align with Alibaba versus a lot of others.
Well, you cant argue with that. Both Amazon and Alibaba are huge entities that have operations in different corners of the world. After firmly entrenching themselves in their home markets of the US and China, the companies have started eyeing other markets, often bringing them into conflict with each other.
Another interesting factor is the modus operandi. While Amazon has a direct presence in the country through its online platform, Alibaba has been fueling its competition, such as Snapdeal and PayTM. The strategy has proved successful so far and Amazon hasn’t made any significant gains over its Chinese rival.
However, the upcoming festive season which sees Indians shop like there is no tomorrow, is almost here and is quite likely to play a significant role in giving one side an edge over the other. Also, the companies are now taking a much more active role in the country.
Recently, Alibaba made its intentions over India clear, when it said that it was going to directly penetrate the Indian market. Amazon is similarly all for an aggressive push into the niche and has lately upped its investments to $5 billion.
Meanwhile, PayTM, which is one of the most significant Alibaba properties in India, is also looking to mark its presence on the subcontinent, more significantly. The company is all set to bifurcate its payments and e-commerce niches this year.
We are going to make the marketplace separate, then we will be able to raise money, or do M&A, which means we will look to acquire correct optimum sized (companies) to become larger.
According to the PayTM CEO, the reason behind the separation is to obtain the ability to both fund-raise, as well as participate in mergers and acquisitions in the respective niches. So basically, we can expect some consolidation in the upcoming quarters.
And lets not forget the payments bank PayTM has in the pipeline. The initiative is also slated to bring major changes to the way banks operate in India and if PayTM gets the go ahead from RBI, we may soon see them mushrooming across the country.
Meanwhile, the upcoming quarters are going to be pretty interesting. With the governments latest rule putting restrictions on the discount and deals that can be offered to customers, it will be interesting to see what kind of deals the e-commerce platforms of the country come up with to trump each other. Meanwhile, Alibaba vs Amazon, its likely to be a hell of a fight between two of the largest corporations in the domain.