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The India visit of Chinese entrepreneur Jack Ma, the 50-year-old founder and executive chairman of Alibaba, once again shows the stature that Indian e-commerce is gaining in the global scheme of things.
The former English teacher, Ma, made headlines after Alibaba's blockbuster IPO on the New York Stock Exchange at around $22 billion. The listing made Ma the richest man in China. He may now have some concrete plans for India.
Ever since Alibaba’s listing, there have been questions on whether India can have its own Alibaba and by when. Ma, during his various interactions with businesses, may try to gauge the potential of Indian e-commerce to some extent. But, he may have more for the market, considering that he is coming to India less than two months after the visit of Jeff Bezos, founder and chief executive of Amazon.
Online retail giants Alibaba and Amazon are in intense competition in the US and other international markets. While Amazon entered the Indian e-commerce space through a marketplace model last year, Alibaba only has a sourcing operation in the country.
India does not permit foreign investment in e-commerce, the reason why companies have chosen the marketplace format. There are no FDI caps for marketplace model as it is seen as a technology and backend business. Marketplace is about internet companies hosting dealers and retailers, who sell their products online.
Alibaba happens to be a natural marketplace player while Amazon’s true model is inventory-linked with full control on the products it sells. Experts point out that because of the marketplace model, Alibaba fits perfectly with the Indian e-commerce industry.
It makes sense therefore that Ma is slated to meet Snapdeal co-founder and CEO Kunal Bahl during this visit. Snapdeal officials, however, said there's no meeting planned between Bahl and Jack Ma.
Four-year-old Snapdeal became a marketplace player soon after it launched, and Bahl has often referred to the company as the ‘’Indian Alibaba’’. There are existing synergies too.
Four-year-old Snapdeal became a marketplace player soon after it launched, and Bahl has often referred to the company as the ‘’Indian Alibaba’’. There are existing synergies too.
Recently, Snapdeal got a $627-million funding from Softbank, the Japanese telecom and internet corporation. And Softbank is the biggest shareholder in Alibaba. Masayoshi Son, 57-year-old founder & CEO of SoftBank, had even visited the Snapdeal office last month and addressed the employees of the company. In his two-hour long interaction with the employees of Snapdeal, the Korean-Japanese business tycoon narrated many of his experiences, including that with Alibaba, people in the know said.
Son, who’s been called a Warren Buffet or Bill Gates of Japan, had invested $20 million in Alibaba some 14 years ago when the Chinese internet firm was just a startup, and that stake is now estimated to be worth $50 billion.
Snapdeal is also one of the three e-commerce companies where Ratan Tata put in his personal money.
Both Son and Bezos had met Prime Minister Narendra Modi during their visit. Ma too is expected to meet Modi after his Nepal trip. Ma is learnt to be on a low-key visit to India as part of a Chinese business delegation.
