Alibaba’s entry, and does it even matter now
1 min read 18 Aug 2016, 10:29 AM ISTIrrespective of Alibaba's mode of entry in India, the Chinese e-commerce giant will have its hands full and also the foray may be a bit late unlike Amazon's in 2013
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The news this morning in the Indian e-commerce space is that Alibaba, the Chinese giant that is spoken of in almost reverential terms in India, is considering entering India by acquiring Shopclues, the smallest of the e-commerce marketplace unicorns. The Times of India reported this possibility (because it is just that right now, a possibility), citing unnamed people familiar with the matter.
There have been multiple theories doing the rounds about how and when Alibaba will choose to enter the market. It may actually be a bit late for the company to come in on its own. Amazon did in 2013, and is close to becoming the largest e-commerce company in India. That window, however, may have closed. Circa 2016, a solo entry may not work. And the short history of the Internet in India is weighed against Chinese companies.
Given that, it is not surprising that Alibaba, whose main investor Softbank Group has an investment in Snapdeal, another e-commerce marketplace in India, is considering a significant acquisition to enter India. Alibaba also has a stake in Snapdeal and given the Softbank connection, it seemed logical, at one time, for the Chinese company to buy the Indian marketplace. Alibaba, through its payments arm, has an investment in Paytm, a payment services firm and e-commerce marketplace. Paytm has been a steady presence in India’s e-commerce market, but not really created waves.
However, in recent months, Snapdeal, and its larger rival, India’s largest marketplace have hit a valuation wall. Snapdeal appears to have been badly hit, although its chief executive officer Kunal Bahl says that’s not the case. Perhaps as a result of this, talks of a Snapdeal acquisition by Alibaba died. In February, there was talk of Alibaba buying Flipkart and merging it with the Paytm marketplace. And now there is talk of a Shopclues acquisition.
Over the course of a year, Alibaba, Indian media (including this paper) has reported, is entering the country on its own, or by buying Flipkart/Snapdeal/Paytm’s marketplace. Clearly, one of them will happen. But irrespective of its mode of entry, Alibaba will have its hands full. Amazon.com Inc.’s Indian arm is in full juggernaut mode, and will take some stopping.
