2015 has seen Alibaba’s name being mentioned far more than ever in the Indian ecommerce context. First there was news about the ecommerce giant’s interest to expand presence in India and help local Indian SMEs to strengthen their businesses. Although a possible investment in Snapdeal fizzled off, intention to acquire ecommerce firms in India was announced immediately after.
After the Chinese ecommerce giant’s tie-up with ICICI to help Indian sellers and partnership with Mypacco, Mumbai-based logistics provider, came the news of an additional 20% stake in Paytm.
Just when we were thinking ‘what next’, we hear the latest: Alibaba has launched a reseller platform in India, meaning the Chinese ecommerce giant will now facilitate cross-border trade for ecommerce merchants in the country. While it will help to strengthen its direct presence in the country, it also seeks to leverage on the interest of global consumers towards Indian products like apparel, jewellery, handicraft and food products.
“We are launching our trade facilitation centre in India to provide support to small and medium businesses with a full suite of export-import services, including logistics, financing and credit support,” said Timothy Leung, head of global business development, Alibaba.
“India has one of the largest manufacturing systems in the world, with about 22 million manufacturers of all kinds. Our idea is to open the global trade opportunity to all of them, irrespective of their size,” Leung said.
Similar to its operations in the home market, Indian exporters and manufacturers will be helped directly by Alibaba. The revenue model varies from that of an online marketplace. While a marketplace would earn from commissions on sales, Alibaba’s revenue would be from listing or membership fees of resellers and manufacturers.
Ethnic products in India have always been popular with global consumers, mainly apparel, handicrafts and jewellery. Although there are many manufacturers and retailers of these in India, most of them are not able to cater to global demand due to lack of awareness or high costs involved.
Usually, SMEs would need to participate in trade shows and similar to get noticed by buyers and pursue leads. But this costs money and needs expertise, which most of them might not have. Instead of spending so much money, sellers can spend the same to list on Alibaba’s B2B platform and connect with registered buyers from the 190 countries.
Alibaba is already the pioneer in the global business-to-business scenario. IT connects buyers and sellers from around 190 countries currently.
The reseller platform in India is an extension of the same segment, to be a link between manufacturers and wholesale exporters, and buyers, eliminating the trading channels in between. The company is confident of crafting success stories in India like it did in the Chinese B2B ecommerce market.
Alibaba will work on an incremental approach to access manufacturing clusters in India.
“In India, the SME sector is concentrated in clusters, with each offering some unique products. So, we are approaching one cluster at a time and appointing partners in each to tap local opportunities,” Leung said.
After dwindling with her family business, into travel and hospitality, for more than 3 years, Pooja Vishant found her true love in writing. Happy-go-lucky and cheerful, she loves pink; so pink is the way to go if you want to get into her good books. The Associate Editor keeps track of even a leaf that has moved in the ecommerce world!
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