Amazon and Flipkart may have strong market shares, but Alibabaare India focuses on investments and partnerships with other e-commerce companies.
When the Second World War came to an end, especially American, hearts and minds. Communism was advancing in Europe and Asia, and Americans feared that countries would fall like dominos under the influence of the USSR and, later, China. The American answer was a strategy called Containment? “Forging partnerships with non-communist countries and offering them military or economic support, so the United States has injected billions of dollars to rebuild war-torn countries, establish military bases in Asia, and wage war for countries like South Korea and South Vietnam.
decades later, Chinaare Alibaba opts for a policy of contention against the Amazon in India.
Indian traders have been able to sell internationally on Alibaba for many years.In 2015, the Chinese e-commerce giant tested the Indian e-commerce market through two investments, Snapdeal and Paytm. Its Snapdeal investment has not was nowhere with the company headed by Kunal Bahl and Rohit Bansal, Paytm, on the other hand, emerged as a strong bet for Alibaba. Paytm managed to break through the digital wave when the Indian government announced Demonetization , forcing many Indians to adopt digital payments. While the ecosystem of transactions, Paytm has been highly publicized and is easily the most dominant player in this category. Alibaba has increased its stake in One97 Communications, Paytm’s parent company, and has invested $ 200 million in the Paytm Mall e-commerce arm this year. The Paytm Mall financing has been seen by observers from the e-commerce industry as Alibaba officially enter India. The question on everyone was whether India’s Alibabaare play would be just as an investor in Paytm. With Alibaba and Paytm investing in BigBasket (the official announcement has not been made yet), we now get clear indications on the Chinese company’s plans for India. It’s obvious now that Paytm is Alibabaare before? ? in India.
Kashyap Deorah, serial entrepreneur and author of The Golden Tap, the story of hyper-funded Indian startups, says:
Paytm / One97 is a subsidiary of Ali Baba. There should be no confusion as to who is driving the long-term strategy. Alibaba, with its payment arm Ant Financials, holds a majority stake in Paytm Mall. Alibaba leaders reportedly camped at Paytmare Noida headquarters and technology and strategy transfers have already taken place, according to company and industry sources. Alibabaare’s intention to invest in BigBasket alongside Paytm also clearly shows that its plans in India will be routed through it.
There was no answer to a detailed questionnaire sent to Paytm.
According to our sources, Alibaba invests and enters into partnerships with other e-commerce companies, ranging from logistics players to food delivery applications. The plan, at least for now, is to create a network or alliance of partners with Paytm at the center.
The grocery segment is heating up
Alibabaare growing aggression in India means for Indian e-commerce? Flipkart and Amazon are one step ahead of Alibaba / Paytm. This is especially true in mobile and fashion, the two categories that represent the largest number of units and the value of sales for online retail.
Alibaba invests in BigBasket give it an edge.
Amazon has made progress in the non-perishable grocery category with Amazon Pantry, now available in around 30 cities. Thanks to Amazon Now, the company makes two-hour grocery deliveries, including perishables, to Bangalore, Delhi-NCR, Mumbai and Hyderabad through partnerships with Bigbazaar, Spar, Hypercity and other supermarkets. Flipkart, meanwhile, is about to launch its own grocery delivery soon.
Alibaba can clearly establish a strong presence in the grocery store with an investment in the leader of the BigBasket category, which currently serving more than 20 cities. At the beginning of the year, BigBasket reported an average of 50,000 orders per day. This seems like a drop in the online retail industry, but grocery shopping is the most important type in the retail industry.
K Vaitheeswaran, pioneer of e-commerce, co-founder in 1999, page The first web-based online sales in India, Fabmart.com, said:
From the perspective of opportunity, grocery stores are the largest retail category. So, it makes sense to focus on that. In addition, this is a category where Amazon can not bring more than 20 years of global experience. There will be more levels of play. Four of BigBasketare’s founders, Hari Menon, VS Sudhakar, Vipul Parekh and VS Ramesh, are co-founders of Fabmart. (later called Fabmall). Vaitheeswaran is also the author of the newly published business thesis, Success Failure: The Story of India’s First E-Commerce Company. Alibaba has experience in grocery stores. She entered the grocery store in China in 13 13 Hema supermarket. At Hema. Orders are delivered at home if they live within 3 kilometers of the store. It will be interesting to see some of the experience in retail food in China, Alibaba will replicate in India. While it is reported that Amazon is also interested in buying shares in BigBasket, some videoix said Mrigank Gutgutia, e-commerce expert and head of RedSeer Consulting, The research and consulting firm, said:
Amazon has focused on building internal capabilities, from genre to logistics. They believe in doing everything organic, as much as possible.
Amazon and Flipkart have gained a strong market share, primarily by significant price reductions and strong investment. in marketing. It is true that both companies have accumulated incredible breadth and depth in the categories, but the price is what brings online customers to India. Flipkart has raised about $ 7 billion since 2009. Amazon, on the other hand, has committed $ 5 billion to the Indian market. Both invest heavily in warehouses with their own warehouses and long distance distribution networks, mid miles and last mile. The Amazon, for example, will close in 2017 with 41 centers in 13 states in India with 13 million cubic feet of storage space.
Both companies now have billions of dollars in revenue. However, no one has built a defensive advantage. India’s online retail market is still worth $ 15 billion, lower than the global retail market exceeding $ 640 billion in 2016. Fllipkart and Amazon can not really rely on the fact that they have accumulated be with Alibaba. These two companies may have spent billions of dollars on the Indian market, but Alibaba has just started spending. RedSeerare Mrigank said that online customers remain the same (estimated 100 million online purchases, only 40 million can be considered active buyers), so Alibaba will have to write Money for winning customers and others will have to do the same thing to retain customers.
So we can expect Paytm Mall, launched in February, is devoting a lot of effort to marketing. with news reports saying that the company has spent Rs 1,000 crore for advertising and marketing during the ongoing shopping festival. With the first sale just signed during the holiday season, Paytm has announced more than 500 million rupees to repay customer purchases on the site. A report in the Economic Times said the company is targeting $ 500 million in revenue this season and the gross value of goods (GMV) of $ 4 billion by the end of the year.
But the reduction will not be the only strategy. Paytm Mall chose a different model from Flipkart and Amazon. He has developed a QR code base on the basis of which offline stores can put their stocks on the net. QR codes, other than QR portfolios, are installed in stores and customers can place an online order for a finished product in the store using code. This O2O model is still at an early stage, but Paytm-Alibaba can incorporate the necessary differences, especially at a time when they do not have their own logistics. Alibaba is clearly open to investment and acquisitions to drive growth in the Indian market.
It would be in the e-commerce and union segments like logistics. In addition to BigBasket, Paytm is said to be negotiating a buyout with the Little Deal Discovery App, the Nearbuy Website Agreement and the Via Travel Portal. It has a large share on the website of the event Insider.in and in 2016 has acquired the EduKart online education market and online offline online retailer. Alibaba’s investment will ensure a lot of such business. Amazon may be more cautious when it comes to investing and acquiring, but that does not mean it has not made such deals in India. It has been reported that he is negotiating with Grofers Grocer. Amazon has invested in Housejoy House and Bank Bazaaar. However, these investments were made in 2015. Flipkart has become a positive acquirer with previous acquisitions such as Myntra, Jabong and Jeeves. This is good news for the Indian start-up ecosystem where funding and exit have been lacking. The start-up ecosystem in the country has produced 178 evacuation routes by 2016, according to research firm CB Insights. This sounds impressive, but the numbers are small compared to the US, including more than 1650 MA technologies and 25 IPO technologies last year.
The real winner, however, is the Indian electronics industry. Last year was a bad year for the industry, with a sharp drop of just 12% versus 180% growth in 2015, according to RedSeer. But Redseer expects a 20% growth for the industry in 2017. Mrigank said:
Two global e-commerce majors who inject money into the country certainly believe it. Good for the industry.
(With the help of Sindhu Kashyaap)