Alibaba once again eyes India for its further expansion plan

 Deepak Kumar | The Dollar Business

China’s e-commerce giant Alibaba on Monday once again sought approval from the Indian government to launch its e-commerce and retail operations in the Indian market. On Friday, Alibaba Group President Michael Evans and Global Managing Director K G Gowrappan held a meeting with the Indian Communications and Information Technology Minister Ravi Shankar Prasad to express the company’s interest. The China-based company intends to launch its operation in India by this year end. Prasad, in turn, assured Alibaba’s top officials that the Indian government would extend its support in the company’s global expansion plan. "We will give them (Alibaba) full cooperation,” Prasad had said after the talks. Alibaba’s founder Jack Ma has visited India several times since 2014. He has also held meetings with Prime Minister Narendra Modi on more than one occasion where he praised Modi’s Make in India initiative and expressed his keen desire to enter into the Indian e-commerce industry. The Indian e-commerce market is said to be one of the world’s largest business segment, pegged to be worth $38 billion by 2016 end. During his visit to India last year, Jack had said he wanted to focus on the Indian market in a big way. Alibaba already has a noteworthy presence in the Indian e-commerce market. It has acquired 40% stake in Paytm and 4% in Snapdeal. The company had in past approached Flipkart to hold certain stakes in the company, but the Indian e-commerce giant had reportedly declined the proposal. In 2014, the e-commerce giant had announced an investment worth $2 billion in the Indian market. The company plans to grow its operations in e-commerce in major cities with retail percolating into smaller cities and towns. Alibaba’s entrance into the Indian e-commerce foray will dramatically enhance the competition for the country’s top three players – Amazon, Flipkart and Snapdeal. Industry experts, meanwhile, said the government should be very strategic in giving a green signal to Alibaba who is looking to expand its operations in the Indian market with foray into e-commerce and retail store segments. They said the government should put some duty on imports of Chinese products to encourage manufacturing in the domestic market. “The one thing the government could do is put some duty on Chinese imported products. This would compel Alibaba to buy products from the Indian market, thereby giving a fillip to domestic manufacturing,” EEPC Chairman Anupam Shah told The Dollar Business. “There is going to be more competition in the Indian market. But what really bothers me is that a similar type of IT bubble bad hit the Indian market when people were opening up software companies, but soon it died down. I hope it doesn’t happen to the e-commerce business,” Shah said. Speaking to The Dollar Business, B C Bhatia, National President, Confederation of All India Traders (CAIT) said, “Administrative laws in India and other countries are different. But, it is a big question what kind of administrative help Alibaba has sought from the Indian government. Every government has a right to defend its domestic market and protect its internal economy. The government should do an impact analysis before giving a final okay.”   

March 19, 2016 | 03:20pm IST