Alibaba Chairman Jack Ma in India, to Meet Snapdeal Chief
Jack Ma, Alibaba’s (BABA) founder and China’s wealthiest man is currently on a visit to India after a record-crushing initial share sale saw the e-commerce giant raise $25 billion in September this year.
Ma is in India as part of a 99-member business delegation from his home town Zhejiang.
According to those familiar with the details of his visit, Ma has met a number of Indian entrepreneurs. However, the most closely watched meeting will be the one with Snapdeal founder Kunal Bahl. Snapdeal is often considered by many to be the Indian version of Alibaba.
Why is Snapdeal such a Big Deal?
Alibaba and Snapdeal have a similar business model, both technology companies providing buyers and sellers a marketplace. This is therefore a significant reason behind the deal being considered a strategic fit.
In fact, Bahl has been very open about the fact that his company is modeled on the lines of Alibaba.
Besides similar business models, another point of resemblance is that Japanese company, Softbank has invested heavily in both of them. Masayoshi Son of Softbank has invested $627 million in Snapdeal.
Meanwhile, Alibaba’s rival Amazon.com (AMZN) is quickly increasing its presence in India, competing with Flipkart and Snapdeal for market leadership. Amazon recently completed its first level of talks to acquire Rocket Internet-backed lifestyle e-tailer Jabong.com.
Alibaba is yet to venture into India, which has the world's third-largest internet user base. According to consulting firm Technopak, the size of the Indian e-tailing industry is forecast to expand to $32 billion by 2020 from $2.3 billion now.
Alibaba already controls about 80% of the e-commerce business in China. It is obvious for the company to be interested in India, particularly if it wants to take on global e-commerce firm Amazon.
Alibaba runs China’s two most popular online shopping sites, Taobao and Tmall. Therefore, in order to get scale, it makes sense for the company to acquire rather than build in India.
Alibaba already has a large number of small Indian businesses on its site. Infact, Indian suppliers rank second after Chinese suppliers.
Ma said that that more than 400,000 Chinese consumers purchase things from. “India has more great products they can sell through our platform to China”, he added.
India in the Spotlight
The election of Narendra Modi as India’s Prime Minister has attracted business leaders globally. Facebook.com’s (FB) Mark Zuckerberg to Google’s (GOOGL) Sundar Pichai, Microsoft's Satya Nadella, Amazon's Jeff Bezos, were among the global leaders who visited India recently.
This clearly highlights India’s increasing prospects.
Ma also said that he was encouraged by Prime Minister Narendra Modi's zealous speech on doing business in India and is looking forward to work with the country.
It remains to be seen whether Ma will surprise Indians with a rapid and quiet entry into the fast growing Indian e-commerce market.
Alibaba currently holds a Zacks Rank #4 (Sell).
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