Alibaba Entered Indian Market
In the past five years competition among e-commerce giants like Amazon, Flipkart etc. has increased exponentially with the growing customer base. The well-known Chinese e-commerce giant, Alibaba was excepted to enter this race, however, the recent news states that this company has already done so by quietly picking up a substantial equity stake in Paytm Mall; home-grown digital payments major Paytm’s new online marketplace business.
Major step for Alibaba
This unprecedented move by Alibaba that includes a 177 million$ investment in Paytm Mall as well as $23 million by the private equity player SAIF Partners has pitted it against all the current e-commerce giants in India.
It is currently believed that Alibaba has a significant equity stake of over 40% in Paytm’s holding company One97; both Alibaba and SAIF Partners are one of the earliest investors in One97 thus in Paytm. Alibaba’s recent investment in Paytm Mall is said to take its stake holding in the e-retailer to 36.31%, whereas post funding 4.66% will be held by SAIF Partners.
Price wars and competition
Though Alibaba was eyeing an entry into India for a long time; this sudden unexpected move by them is sure to lead to quite an upheaval in the e-commerce field. Alibaba’s entry into this e-commerce race will lead to struggles like price wars, sales, and other competitive business practices.
After the recent news of Amazon’s$5 billion investment and now the entry of Alibaba indicate that these e-commerce giants have come to stay.