Alibaba Enters India Ecommerce Market Through UCWeb, But Won’t Compete With Paytm

Alibaba Group has finally announced its entry into the Indian ecommerce market through the ultra-popular UCWeb browser app.

The China-based company plans to start fully-owned ecommerce business in India through UCWeb. While the business model and the details about the ecommerce service haven’t been revealed, Alibaba said that it would also include online movie ticket bookings, which would put it in competition with BookMyShow and Paytm.

UCWeb Global Business Vice President Huaiyuan Yang said that Alibaba’s entry would not have an adverse effect on Paytm’s ecommerce business. Incidentally, Alibaba owns 30.15% stake in Paytm, which runs ecommerce marketplace Paytm Mall.

Yang added: “We have Alibaba’s e-commerce gene in us. We are actually trying to start an innovative business model related to e-commerce. We are going to launch a new e-commerce product in India this year.”

Alibaba will choose a section according to their business and will partner with the right players. It does not intend to compete with them, in reference to Paytm, he further said.

UCWeb: Alibaba’s Secret Weapon?

UCWeb, a browser app which has been available in India since 2009, claims to have over 1.1 Bn downloads worldwide, excluding China. Half of this is claimed to be from India, which makes the country its primary market outside China.

UCWeb also claims to have 130 Mn monthly active users in the country, which would be a good starting point for the ecommerce service. Beyond just a browser, it’s also a news and content discovery platform and the ecommerce business would presumably fit into this discovery channel.

“E-commerce is a very vast business. There are various aspects to an e-commerce business and several products. UC will choose sections according to our business. We will partner with the right players and we will not compete with them (Paytm).” – Huaiyuan Yang

While Alibaba has been actively involved in the Indian startup ecosystem through its investments, it has not yet made a direct entry into any of the sectors it has invested in.

In May, the company has reportedly invested $100 Mn in VMate, a short video sharing app launched by UCWeb. The investment was an attempt to venture into the lucrative Indian social video app space. The company also owns stakes in Snapdeal, Zomato, Xpressbees and BigBasket. However, it hasn’t said anything regarding the impact of its ecommerce venture on these businesses — or whether there would be cross-selling involved for its partner companies.

The development comes after Alibaba decided to pause all new investments temporarily paused all new investments in India to rethink its business strategy in India, last month. Alibaba was less than happy with the losses incurred by Paytm Mall and Snapdeal in the latest fiscal year. The company was reportedly unable to find any opportunity within its focus areas that would compel it to invest further.

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