Brick-and-mortar stores have taken quite a hit with the upcoming of E-Commerce websites. E-commerce websites have changed the way people think about shopping. Even amongst e-commerce websites there is acute competition to emerge as the ultimate shopping destination. Bigwigs like Amazon, Flipkart and Snapdeal have all been facing losses inspite of offering crazy discounts and deals. While these players think of what to do next, China’s biggest e-commerce player, Alibaba, plans to enter the E-commerce in India later this year.
Alibaba has been analysing the Indian markets for quite some time now and thinks it’s very apt for them to make a start on the backdrop of Digital India. Indian shopping trends have started to change now as consumers have now started to accept online shopping portals and this seems to be the perfect opportunity for Alibaba to seize.
Alibaba Group’s President Michael Evans and its Global Managing Director K. Guru Gowrappan had a meeting with Communications and IT Minister Ravi Shankar Prasad on Saturday to discuss their investment plans in India for the e-commerce sector. Speaking about the meeting, Ravi Prasad said: “We hope Alibaba will come and have a good footprint in India, including the expanding business of ecommerce (for which) they are exploring the possibility. I have said very clearly that Alibaba is quite free to come and expand its footprint in India.”
Alibaba already has its hands in the payment and e-tailing business here in India, having invested in Paytm and Snapdeal. Instead of buying into any existing e-commerce company, Alibaba is expected to set up its own. All the Indian commerce sites seem to have a long-term aim and things aren’t expected to change inspite of rumours of Alibaba tying up with Flipkart and Snapdeal.
Alibaba is in talks with Tata to venture into the retail market in India. Since Tata already owns a network of logistics providers, distribution centres and warehouses it’ll certainly make sense for Jack Ma-owned Alibaba to join hands with them.
Restrictions on foreign direct investment (FDI) have thus far prevented any foreign company from selling direct to consumers in the country, but, by hosting a site where third parties do the selling, the issue is sidestepped.
Morgan Stanley estimates the total Indian internet market size will grow to $159 billion by 2020 to emerge as the fastest-growing e-commerce market globally, from $16 billion now. Just to put things in perspective, Alibaba sold goods worth $377 billion in 2015, compared with around $16 billion by all of India’s e-commerce companies put together, according to Morgan Stanley.
With the entry of Alibaba things will surely get interesting in the E-commerce market. Alibaba has been greatly successful in China and it having 80% of the e-commerce market out there surely proves to be a testament of its capabilities.
Alibaba was founded in 1999 by Jack Ma and currently employees more than 34,000 people with last year’s revenue being 11.75 Billion Dollars.