uploads/2016/08/Retail-ecom-sales-India-1.png

Alibaba’s Strategy for India Unveiled

By

Updated

Alibaba might acquire India-based ShopClues

Alibaba (BABA) is planning to enter the Indian market through series of acquisitions, and it has been in talks to acquire online marketplace ShopClues.com, which has been valued at about $1 billion.

Alibaba, which already has a stake in Snapdeal and Paytm, India’s largest mobile payment company, is expected to merge the marketplace arm of Paytm with the bigger rival ShopClues to fortify its position against fast-growing Amazon.com (AMZN).

Article continues below advertisement

Meanwhile, Amazon has been investing heavily in India and has emerged as the second-largest online marketplace in shipments in that region. Importantly, Amazon managed to grow its share compared to 2015, whereas Flipkart and Snapdeal, in which Alibaba has a stake, have witnessed declines in their market shares.

Why e-commerce giants are investing in India

India is a key market for e-commerce giants around the world because the country remains one of the fastest-growing economies in the world. The Indian e-commerce market is experiencing strong growth, thanks to the country’s growing per capita income, Internet penetration, and its increasing number of online shoppers.

According to eMarketer, India is expected to generate strong double-digit e-commerce sales growth, as can be seen in the chart above. Given this huge growth potential, e-commerce giants like Amazon, eBay (EBAY), and Alibaba continue to invest heavily in India.

Now let’s analyze Alibaba’s monetization rate.

Advertisement

More From Market Realist