Alibaba.com Ltd, which bills itself as the world’s largest online B2B (business to business) marketplace, entered into a strategic partnership with Infomedia India Ltd, now owned by Network 18 Fincap Ltd, to woo small and medium Indian businesses (SMEs).
For the Chinese company, in which Yahoo! Inc owns a 39% stake, the alliance is the first step towards establishing a direct presence in India.
Strategic alliance: Arthur Chang, vice-president (global sales), Alibaba.com, and Prakash Iyer, managing director, Infomedia India Ltd.
“With this partnership, we want to combine online and offline (models) to provide a one-stop shop for SMEs here,” said Arthur Chang, a vice president at Alibaba. “We are considering setting up an office (in India).”
India is among the top three markets for Alibaba’s international trade listings for global import and export businesses, along with the US and South-East Asia. With 400,000 registered users, India represents 8% of its business.
Alibaba estimates there are one million SMEs in the export business in India, out of a total eight million. The company will focus on segments catering to textile, auto components, jewellery and chemical industries.
Alibaba earns revenues through a combination of online advertising and paid subscriptions from sellers. Its move into India is part of its strategy to grow globally, as a large chunk of its revenue comes from domestic trade listings within China.
Under the tie-up, Infomedia, which lists about 750,000 businesses in its Yellow Pages and has 650 salespeople, will provide direct customer support for Alibaba’s Indian users, as well as create awareness about the Chinese company’s offerings through joint marketing initiatives. The alliance is currently a business partnership, but Infomedia managing director Prakash Iyer did not rule out the possibility of a strategic investment later.