Alibaba to Pick 50% Stake Worth $5-6 Billion in Reliance Retail To Launch E-Commerce JV in India

The great Indian consumer market, be it of any sort, is on rampage as within six months of Flipkart acquisition by Walmart, its now China's Alibaba Group Holding who is reportedly in talks with Reliance Retail to enter in a joint venture (JV) worth massive US$5-6 billion.

According to a report by LiveMint, Alibaba’s chairman Jack Ma held talks with Reliance Industries’ chairman Mukesh Ambani, who is also an India's richest man, in July-end in Mumbai and discussed about plan to create a large omnichannel i.e. both online as well offline, retail entity through the proposed JV, the report said.

Alibaba has moved a proposal according to which its willing to pick up a significant stake in Reliance Retail -- preferably 50% -- which will require Alibaba to invest $5-6 billion and it could also result in a strategic JV between Alibaba and Reliance Retail, with a smaller stake held by Alibaba, the report added.

If this massive deal goes through, it will be the largest investment by Alibaba in an Indian company.

In India, Alibaba Holding Group and its affiliates has picked up the stake in number of Indian companies including Paytm, Bigbasket and Zomato, among others.

Citing a person privy to this development, the report added that Alibaba had picked up the stake in Paytm with the objective of benefiting from Paytm’s successful e-commerce and digital wallet business in India. Reliance Retail is planning a similar model like Paytm, and once that happens, Alibaba will benefit the same way it was gaining from its association with Paytm.

Notably, Taobao and its spun off Tmall are two of the world’s largest and most popular online retail marketplaces operating in china and owned by Alibaba group, and both these e-commerce entities have together achieved a total transaction volume of $478.6 billion in fiscal 2016, and hope to double the figure to over $900 billion by 2020. As of February 2018, Taobao had at least 580 million monthly active users, while Tmall had 500 million.

With over 1 billion product listings as of 2016, the combined transaction volume of Taobao a C2C Marketplace, and Tmall.com, a B2C online marketplace, reached 3 trillion yuan in 2017, which is more than that of all US retailers and e-commerce sites combined together.

The JV between Alibaba and Reliance is also being seen as a strategic move to challenge the likes of Flipkart and Amazon who have been making significant inroads in the Indian e-commerce industry. Just few days back, Amazon has completed its five years in India and invested fresh ₹2,700 crore in its India operations.


In February this year, Alibaba has already invested whopping $500 million in India's Bigbasket and Zomato. Last month, the Chinese firm also picked up a $35 million stake in logistics startup Xpressbees, spun out of baby products retailer FirstCry.

About Reliance, its another subsidiary, Reliance Jio, is also planning to make entry into India's online grocery market by linking manufacturers, kirana stores and corner shops to his Reliance Jio customers and mint money.

It may also be recalled that in last November, Adani Wilmar, the company that markets ‘Fortune’ brand of food products in India, also announced its plans to enter the online grocery sales business with a new e-commerce portal and app called ‘Fortune Online’.

China’s Tencent Looking For More Investment Opportunities in India, Tracking Alibaba’s Footsteps In The Country

China’s Tencent Holdings has its eyes set on India’s booming startup industry. Recent times have seen the investment firm increasing its activity in the market and emerging as one of the most closely watched investors in Indian internet startups. Experts believe that the Chinese investment major, which is trying to build a market for itself outside of its home country, wants to ape the kind of presence Chinese ecommerce major Alibaba has been able to achieve in the Indian subcontinent.

According to information available, the Chinese investment holding company has so far already invested a whopping $850-900 million in the Indian startup Industry. This includes its $700 million investment in India’s ecommerce leader Flipkart Ltd.

Tencent made its investor entry into the Indian startup industry two years ago in 2015 by leading a $90 million round in Practo Technologies, a digital health platform. Other than Flipkart and Practo, the Chinese company has also invested in India’s homegrown WhatsApp rival messaging app Hike. According to media reports, the investment firm has reportedly recently also invested somewhere between $400-500 million in India’s homegrown ride-hailing giant Ola.

With Ola, the Chinese investment holding group will be marking its presence in four major sectors of the Indian market: ecommerce, cab-hailing segment, digital healthcare and messaging.

According to a report in Livemint, Tencent Holdings has plans of entering and capturing various other Indian sectors with its presence in the next few years. In fact, two people close to the firm told the newspaper that the Chinese investment firm is currently in talks for investing in online insurance retailer Policybazaar. They also revealed that the firm has appointed Tejeshwi Sharma from Sequoia Capital India to fetch them interesting investment opportunities in the Indian internet market. Currently, Chris Huskey, a senior Tencent executive based out of Hong Kong, is responding for tracking the firm’s investments in the Indian market.

Not many know that the company first debuted its presence in India in 2014 when it set up a shop here with an aim of taking its messaging app WeChat to next levels of popularity. However, unable to stand WhatsApp’s competition, Tencent decided to make a shift from running a business in the country to investing in them in 2016.

Currently valued at more than a jaw-dropping $400 billion, Tencent makes majority of its money from two of its messaging apps, WeChat and QQ, which are all-in-one platforms for gaming, shopping, social networking and even includes payments.

Tencent and Alibaba, both consider India has a crucial market for themselves outside of their home country, China. As their country’s internet market has started its journey towards maturing, both the companies have to expand their horizons to markets outside of their country if they wish to keep pace with the growth rate and maintain their valuations.

India’s internet market is considered as the last major unconquered market in the world. While the size of the market might just be a fraction of China’s Internet market, but the country with the second largest population on the planet offers a large pool of internet users, which is considered as an important metric when it comes to internet business.

“Tencent believes that India is behind China by 5-10 years. It thinks that India will play out in a somewhat similar way to China, so it is placing bets early. It will start getting operationally involved in some of the companies within the next two years. Tencent will back its portfolio companies that see traction, and also wants to increase its stake in them,” said one of the two people mentioned by livemint in its report.

Tencent and Alibaba are currently two of the most influential internet companies in China, who are constantly battling each other for the numero uno throne. Hence, it can be expected that their rivalry will continue in the Indian internet market as well.

[Image: The Business Times]

Alibaba Group’s UC News Registers 100M Active Users in India and Indonesia

UCWeb, an Alibaba Mobile Business Group company, today announced that its latest product, UC News, has crossed 100 Million Monthly Active Users (MAUs) in India and Indonesia. With 100 million daily article views, UC News has rapidly grown in India & Indonesia market since its launch in June 2016. UCWeb is augmenting its focus on digital content aggregation and distribution in the world’s second largest internet market, India.

Talking on the latest milestone, Jack Huang, President-Overseas Business, Alibaba Mobile Business Group, said “We are experiencing a fast rise in the average time spent on UC News. As of this quarter, an average user spends over 23 minutes on UC News. Users are embracing diverse digital content and their appetite for such content is being met by UC News. Going forward, we are also targeting more diversified and localised content on our platform by end of 2017 to make the local content ecosystem stronger. With over 100 million MAUs, UCWeb envisions itself as powerful as Google and Facebook and aims to bring the global mobile internet to an era of ‘GUF’ (Google, UCWeb and Facebook).”

Leading the user-generated content ecosystem in India, UC News recently announced The We-Media Reward Plan 2.0 for self-publishers, bloggers & independent writers with an initial investment of 50 Million INR. UCWeb is investing 2 Billion INR for driving content distribution in India over the next 2 years. With the changing mobile internet landscape, UCWeb has adopted a strategy of becoming a content distribution platform from being a browsing tool by engaging and aggregating diverse form of content on its platforms – UC Browser and UC News. UC Browser is now the preferred option for mobile browsing and an ideal platform for accessing different kinds of content.

In a recently released report, UC Browser has achieved the highest browser market share in India, according to leading web analytics firm StatCounter. UC Browser is now the most popular browser in India in terms of internet usage across all platforms combined (Mobile, Desktop, Tablet, Console) with a market share at 43.31% followed by Chrome at 36.07% and Opera at 8.34%. UC Browser is also the dominant browser for mobile internet in India with over 100 mn Monthly Active Users (as of Sept 2016).

Indians are amongst the world leaders in terms of internet usage on mobile phones. According to StatCounter, internet usage in India by desktop and tablet fell from 33.2% in January 2016 to 21% this year. Mobile internet usage jumped from 66.8% to 79% over the same time period.

Paytm Adds Alibaba Group MD K Guru Gowrappan to Its Board

Indian mobile payment and commerce company, Paytm has announced that K. Guru Gowrappan, Global Managing Director of the Alibaba Group will join its board as an Additional Director.

Guru is responsible for driving strong growth in Alibaba’s international markets. He is in charge of international product and business development strategy, which includes bringing all Alibaba products together into one final strategic plan and executing it in key markets. At Paytm, he will be regularly engaging with business, product and tech teams to ensure strong and scalable growth for the company.

Speaking on the announcement, Paytm founder-CEO Vijay Shekhar Sharma said, “It’s an incredible feeling to officially welcome Guru, a long-standing friend and ally to Paytm. We are at an important juncture in the company’s evolution, and Guru’s strong expertise in global business and product development will guide us through executing key strategic initiatives for the company.”

"I am honored to join the board of a company I have observed and admired over the last couple of years," said Guru. “It’s both exciting and fulfilling to be trusted with the opportunity to mentor the incredible team at Paytm as the company moves into the next chapter of its growth.”

Guru has more than 15 years of experience in the Internet industry and is one of the top leaders in scaling mobile product and business execution globally. Prior to Alibaba, he was the Chief Operating Officer at mobile search engine Quixey. He led Product, Business, and Marketing-based organizations and played a major role in the company’s global development and financial strategy.

Guru has served as the COO for emerging initiatives at Zynga, a social gaming company. He was elected the Head of Zynga Japan and drove the company to a successful IPO. He has also worked at Overture, where he helped define the multi-billion dollar search marketing industry. Once the firm was acquired by Yahoo, he held many leadership roles, most recently as Global Head of Product, Program Management and Operations at Yahoo.

Guru was a co-founder of two Indian startups and an active angel investor and adviser. He has deep experience in various areas including global management and scaling, M&A integration operations, mobile product and technology management.