This will not prevent the Chinese technology giant from setting India as its first major goal overseas and is accelerating its investment in India in the past week alone, with Alibaba taking the $ 200 million BigBasket, a leading online grocery retailer Stake, and its associate firm Ant Financial, which specializes in the payment area, agreed to invest $ 200 million in the subscription application Zomato.
Alibaba has also recently invested in XpressBees, a logistics group that has developed a three-in-one business model for shopping, payment and distribution in China's domestic market, with the investment in XpressBees filling the last of them - distribution .
'Just as Amazon laid out its global strategy in India, as did Alibaba,' said Indian tech entrepreneur and writer Kashyap Tokolah.
Alibaba, founded by Ma Yun, a former English teacher, started an Indian adventure in February 2015 by investing undisclosed information on financial technology start-up Paytm - and re-injecting 680 million U.S. dollars The largest payer of Paytm, and then made the majority stake in Paytm's e-commerce platform.
India's e-commerce market is very different from China, where India is fiercer - including rivaling Amazon with little presence in China - dilapidated infrastructure and depopulated populations.
Xpressbees founder Armitage - Saha admits that in India, logistics is also a more serious challenge.Networking grocery consumption depends on the scale - scale makes Alibaba in China through a huge network of local silos, Delivering goods to customers within hours, he said, adding India's limited customer base makes such systems too expensive.
In addition, Indians have lower spending power, and according to 2016 data, nominal income per capita in India is $ 1,709, less than a quarter of that in China ($ 8,123). Their use of equipment for online shopping Also poor: According to research from the Omidyar Network, less than a quarter of Indians owned smartphones last year, and one-third of them have no data connection, and half of China's population has intelligence Phone
According to Forrester Research, e-commerce accounts for a very small fraction of Indian retailing - with ecommerce sales of $ 19.6 billion last year, up 20% from a year earlier, a 103% increase from two years ago The slowdown, as e-commerce companies have developed early adopters among wealthy groups in big cities, makes it difficult to continue expanding their user base.
However, Bernstein Research analyst Barutosh Vajpayee said more deals will be made in the future as more foreign companies enter the Indian market, and while Alibaba is building its ecosystem, Two other rivals in the technology industry, Tencent and Softbank Japan, are strongly supporting Flipkart, a local e-commerce group in India. "15 China, perhaps 20 or 20 years ago, may be India now," he said. Indian e-commerce is currently in its infancy Stage, time will prove that this is a long game.
In the meantime, Amazon promised to invest 5 billion U.S. dollars in India to establish India as a key overseas market for its priority development.
Alibaba places its strategic focus on Paytm and uses it to compete with Amazon Payee's founder, Vijay Sheikh Sharma, claims to be inspired by Ma's speech in 2011. Chief Financial Officer Madur Dhi Euler said the platform, a combination of shopping and payment, "is very similar" to Alibaba's domestic model in China, but "there are important differences in focus."
One of the differences is the order in which Alibaba is building its e-commerce ecosystem, where it starts from the seller's platform and then into the payment and logistics sector, Paytm is expanding in the reverse order, which is by far the most Popular digital payment operator with more than 200 million registered users.
With Alibaba backing, Paytm has expanded its suite of financial services but remains far from the leader in e-commerce, according to one person familiar with Paytm, one month after Alibaba's holdings of the platform, Paytm's monthly turnover The amount reached almost two-thirds of Flipkart or Amazon.
Last year, the company introduced Paytm Mall, a more similar model to Alibaba.com: providing virtual markets like eBay that allow sellers to sell goods on top of it, instead of taking the kind of money that Amazon and Flipkart have invested in the warehouse Full inventory model.
Sangjit-Vir-Gogiya, founder of consultancy Greyhound Knowledge Group, said that this model of development offers Alibaba a potential that will enable it to operate much faster and at a lower cost than its Indian counterpart "He said that their models are much lighter inventories, so they can focus their investment on building the network."
He added that Paytm is particularly confronted with huge opportunities in small and medium-sized cities in India, whose e-commerce rivals have limited influence in these cities, but these locations may provide strong impetus for future growth.
But Alibaba is also targeting middle-to-high-income customers in the big cities - evidenced by its investment in BigBasket, which is fueled by more and more wealthy Indian families, a move that reflects Alibaba's eagerness to create A deeply integrated, integrated enterprise network that takes customers from one digital service to another.
Hari Menon, chief executive of BigBasket, said that we will have access to massive traffic through new relationships with Paytm.
Alibaba has shown no signs of easing its expansion in India and is now accelerating its other advanced services in China to India, where Alibaba entered the gaming space last month to bring Paytm and Alibaba's Hong Kong subsidiary Yabo Technology; also launched the first data center in India to provide cloud computing services, trying to get away from Amazon's competition, the hands of Indian business customers.
Alibaba is also considering moving into India's streaming video space, where it faces rivals Amazon, Netflix and Sky Group India, controlled by Rupert Murdoch.
Sadis-Mina, an analyst at Forrester Research, said Alibaba will eventually "reach all-ready stages" before they can really start investing heavily.
India: Not exactly China 2.0
This is a not-so-new idea we often hear from multinational technology companies and start-ups: India should have been the next China, but it does not seem like a day to come.
India has less disposable income, longer incomes and far less access to the Internet than in China.In addition, Beijing has always placed top priority in science and technology so that enterprises can flourish in China, while India lacks The emphasis on the industry, industrial policies pay more attention to the development of manufacturing.
A large number of start-ups have simply confession - their balance sheets overwhelmed by the huge discount, and once the big winds of foreign VCs are no longer willing to fill its funding gap.
Larger multinational corporations take a different approach by trying to overcome the problems of under-bandwidth and limited user funding with specially designed services such as Google's offline YouTube service in India and other similar markets.
For example, Facebook has tried to introduce Free Basics, a limited free mobile Internet service, but India rejected the offer, saying the move would distort open Internet access.
A similar effort was made in India, where Jio, a telecommunications unit of Reliance Industries, entered the market 18 months earlier with a credit plan including data (a little less than the price of a voice-only package): The daily maximum download traffic 1G 28 day package price of 149 Indian rupees (2.30 US dollars).
Recently, Hike Messenger, a product of WhatsApp, launched a platform that allows users to surf the Internet without any subscription to mobile data using limited features such as live cricket scores.
This, in turn, gave some inspiration to Chinese competitors: working with local businesses, which led to Alibaba.com stake in Paytm and other companies, Tencent investing in Hike Messenger and Flipkart.