After heavily investing in Indian startups, Alibaba is now aiming to capture $38 billion Indian eCommerce market; the first steps have already been taken.
As per reports coming in, it was revealed that Alibaba is planning to launch their own ecommerce portal by the end of 2016; and meetings with Government officials and possible partnerships is already on.
This news can give Amazon some sleepless nights as Alibaba is also attempting to invest in Flipkart and acquire some stake in them, so that when they launch their own ecommerce portal, then they have enough reach and impact to make a dent.
Maybe this is the reason Amazon was also attempting to acquire Flipkart, and then indulge in a major ecommerce battle with SoftBank powered Alibaba right inside the Indian sub-continent.
As per available news, Alibaba’s management is holding some high profile meetings with the Indian Government and they are soon going to announce a major coup, which has the potential to disrupt the industry. Last week, Alibaba Group president Michael Evans & global managing director K Guru Gowrappan met Telecom and IT minister Ravi Shankar Prasad.
Minister Prasad sounded optimistic and enthusiast when he shared, “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.”
It seems that Alibaba is trying to launch a model which combines both offline and online retail, and then launch a comprehensive ‘retail solution’ targeted for the small businesses, which are looking for greater expansion.
Minister Prasad also said, “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.”
One of the officials present during the meeting was sure that Alibaba wants to partner with some local player, so that the FDI rules are being taken care of. FDI is only allowed in B2B niche in India, and this may cause some legal issues.
Indian ecommerce market had been in Alibaba’s agenda, as they have repeatedly said that after China, India is their most important market. Last year, they launched SMILE program to entice 1 crore+ Indian SMEs with their world class fulfillment and delivery services; besides launching incubator for mobile startups & strategic partnerships to expand their user base.
In fact, in between, such was the effect of Alibaba’s pseudo presence in India that Indian Govt. had to launch their own global B2B business hub in association with India Post; but now, it seems that India Post will themselves help Alibaba to set up their shop and business.
Having said that, concerns like fake products openly available on Alibaba’s platform remains an issue (Alibaba sold $45 billion worth of fake products in 2014!)
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