SUMMARY
• Alibaba has revived talks as it wants to boost its omni-channel or multi-channel retailing plans in India
• It is also being speculated that Alibaba, along with Goldman Sachs, could be a part of the consortium being made by Samara Capital
• Alibaba is focussed on using the older investments in Paytm Mall, BigBasket, Zomato, and TicketNew into the proposed new partnerships to tap synergies
Chinese ecommerce behemoth Alibaba has revived its talks with influential Indian conglomerates, including Mukesh Ambani-led Reliance Industries (RIL), Tata Group, and Kishore Biyani’s Future Retail. The talks include the formation of a possible joint venture or a broader synergistic alliance, with Alibaba picking up a stake in the retail entities of any of the three groups.
Omni-channel or multi-channel retailing provides shoppers with a consistent and seamless buying experience across online and offline stores. The ecommerce giant has popularised the offline-to-online model (O2O) in China, especially to on-board offline users who may not be making purchases through online platforms.
Reportedly, senior executives from Alibaba have been holding discussions with the three conglomerates in recent months with the purpose to accelerate their India push.
Alibaba has been pushing plans in India since the Walmart acquired Flipkart in a $16 Bn deal. Amazon also recently invested an additional $385.8 Mn (INR 2,700 Cr) in its Indian business, taking its total investment in India to nearly $4 Bn in the last five years of its operations.
Alibaba is focusing on using the older investments in Paytm Mall, BigBasket, Zomato, and TicketNew, in the proposed new partnerships to tap synergies. It has been pushing Paytm Mall to approach the market with the O2O model, unlike other players who rely on a mix of inventory and marketplace model in India.
According to the reports, with the planned joint ventutre, Alibaba aims to boost its omni-channel or multi-channel retailing plans in India, the world’s sixth largest economy. Moreover, RIL, Tata, and Future Retail have a significant retailing footprint, which can help Alibaba in boosting its omni-channel blueprint in the country.
Earlier this week, Inc42 reported that Kishore Biyani is looking to close a deal with a foreign investor in the next couple of months but has not disclosed the name of the alliance partner as yet. Speculation is rife that Amazon has held talks with Biyani to acquire a stake in Future Retail.
On the other hand, Alibaba has drawn up a list of possible partners that goes beyond the above-mentioned conglomerates and may include another partner which will be identified in the next few months. It is also being speculated that Alibaba, along with Goldman Sachs, could be a part of the consortium that Samara Capital is putting together to acquire more supermarkets from the Aditya Birla Group.
Other Ventures By Alibaba In India
Alibaba has launched a new distribution channel programme to encourage partners to bring in-depth technical knowledge to customers. It had also said to build a specialised team to focus on various market segments and sectors such as startup and online business.
Recently, Alibaba invested $25 Mn in the ecommerce company Paytm Mall for 46% stake. SoftBank’s investment arm SB Investment Holdings had pumped in close to $200 Mn.
Alibaba has been opening up its investments strategy in India and is focussing on sectors that have a high-frequency use case and high level of user engagement. It owns a 40% stake in Paytm’s parent company One97 Communications. Bengaluru-based BigBasket had also raised $300 Mn Series E funding in a round led by Chinese conglomerate Alibaba in February this year.
RIL has a plethora of businesses and is working with on its own omni-channel strategy in tandem with Reliance Jio, thus it is unclear whether it would want to induct a foreign partner right now.
Also, it is unclear whether Tata is ready to bring in an overseas partner in its retail business as it is focussed on scaling up and integrating the physical and digital retail platforms.
[The development was reported by ET]
