Chinese e-commerce giant Alibaba has been slowly but steadily making its presence felt in the Indian startup scene over the last couple of years. While Amazon has launched a full blown attack into India, Alibaba has been keeping a low profile but going for the big guns. As of today, Alibaba has clenched its teeth across e-commerce, web content, online ticketing and digital payments businesses in India. It is most likely to add many more businesses in its portfolio in the near future and give its American counterpart Amazon a run for its money in India, just the way it drove out the latter out of its home country China.
Here’s how the group that began in 1999 when Jack Ma founded the website Alibaba.com, a business-to-business portal to connect Chinese manufacturers with overseas buyers, is making its way into India.
The Paytm Investment: The First Move
The Chinese ecommerce giant made its first move in India two years ago in 2015 by making an investment in Vijay Shekhar Sharma’s Paytm, a mobile wallet firm. As of today, its stake in Paytm has grown to 60 per cent. The mobile wallet, which was a big winner in the post-demonetisation period, has now become India’s second-most valued startup ($7-8 billion). Recent data from the Reserve Bank Of India (RBI) highlights digital payment companies like Paytm, MobiKwik, FreeCharge clocked PPI payments worth a whopping Rs 13 billion in value across 59 million transactions in November 2016.
Inspired by Alibaba, Paytm has recently separated its wallet and e-commerce businesses, spun off its online marketplace into Paytm Mall and is now directly locking horns with Indian e-commerce biggies Amazon and Flipkart. The rumour mill is also hot with rumours that the Chinese e-commerce giant is interested in selling in India via Alibaba.com, but is currently working out some quirks. However, it is amply clear that the rapidly growing Indian e-commerce market has caught Alibaba’s attention and now it wants a bite, how large or small isn’t clear yet.
According to a report by Google & AT Kearney, India’s online retail sales are estimated to reach $55-60 billion in another 3 years. Experts predict that the period would witness 2-3 big players emerging from the ongoing churn and consolidation. And one of them is going to be China’s Alibaba.
Alibaba Cloud Is Setting Up Data Centres in India
Earlier this week, China’s Alibaba Group’s cloud computing arm, Alibaba Cloud, announced that it will open two new data centres in Mumbai (India) and Jakarta (Indonesia) by March 31 next year (Read Here). According to data from Gartner, India’s cloud computing market will grow to a whopping $1.81 billion by the end of this year. With its entry into the Indian cloud computing market, Alibaba will go head-to-head with global cloud computing giants like IBM, Microsoft Azure, Amazon Web Services and Google that have already established their presence in India.
According to information available, Alibaba Cloud data centres in India will give enterprises and organisations the power to build their entire IT infrastructure from A to Z. In fact, not only did the company announce the launch of its data centres next year but it also revealed that it has already locked in deals with subsidiaries of Tata Communications and Reliance Communications.
India is poised to be the second-largest market for data centres in Asia-Pacific by 2020 and the investments are expected to reach $7 billion, according to a report by Internet and Mobile Association of India (IAMAI). Considering this, Alibaba seems to be making all the right moves.
The ever-growing UC Web Ecosystem
While Amazon with its streaming service Prime Video might not have struck the gold it was expecting in the content game, but Alibaba with its UCWeb, which is a part of the Alibaba Mobile Business Group is writing history. UC Browser, which is one of the key products of UCWeb, has been the South Asian country’s leading mobile internet browser for two years now.
According to Mary Meeker’s annual Internet Trends report for the year 2017, China’s UC Web browser with a 50 per cent share has taken over Google Chrome’s 32 per cent market share in India. The report also revealed that UC Browser is the sixth most downloaded Android app in India. UC Web’s other product, UC News has also has crossed the 100 Million Monthly Active Users (MAUs) in India and Indonesia within a year of its launch in June last year (Read Here).
Earlier this year, the Chinese giant announced a jaw dropping Rs. 2 billion investment to build UCWeb in India over the next two years. The group aims to tap into the largely unexplored potential of user-generated content in the country. UC Web through its We-Media program, where users can register and post their own articles, photos, videos etc, plans to host content from over 1,000 individual creators. According to a statement by the company, “In the near future, we believe that more professionally trained content contributors will establish themselves as ‘We-Media’, a collective term for those who turn themselves into independent media brands.”
Looking closely one would observe that Alibaba is focused on a creating a vibrant content ecosystem as an alternative to the already existing platforms in the country. With this, not only is it opening the consumers to new opportunities and to experiences but it is also paving way for companies to come together for collaborations and tie-ups.
Debuting In Indian Online Ticketing Space
Earlier this month, Alibaba made some major waves in the Indian startup scene when it acquired a substantial majority stake in Chennai-based Orbgen Technologies Private Limited for a whopping 120 crore (Read Here). Having offices in Chennai and Hyderabad, Orbgen is famous for its online-ticketing website, TicketNew, which was established ten years ago in 2007 by Ramkumar Nammalvar.
The acquisition, which took place through Alibaba’s flagship entertainment arm,
Alibaba Pictures Group Limited, signifies the company’s first major purchase outside China’s burgeoning internet ticketing market.
It is interesting to note that Alibaba-backed Paytm is also operating in the movie ticketing space with Paytm Movies. Within a year, it has grown to challenge the established incumbents operating in the sector like Bookmyshow.
According to several rumours, Alibaba is also considering expanding its services to travel ticketing, a space where where Paytm too operates. Is this goes through, it would end up creating newer revenue opportunities for the Chinese giant and give it an edge over its global rival Amazon, in India.