Whether the Jack Ma-led Chinese major enters the Indian e-commerce sector as Alibaba or 'Alibaba plus', there will be two definite gainers, consumers and the segment.
Analysts and stakeholders said so to Business Standard after the surprise statement by a company executive on Friday evening. "We are planning to enter the e-commerce business in India in 2016,'' Alibaba group president J Michael Evans told reporters here, after his meeting with communications and information technology minister Ravi Shankar Prasad.
Alibaba, in the headlines for months following a stunning initial public offering in 2014, is yet to reveal its India plans. This has kept the e-commerce world guessing on what its entry would mean to the existing entities and the sector.
Most experts say Alibaba is likely to make a dash into Indian e-commerce on its own, quite like Amazon did almost three years earlier. Its investments in existing players such as Paytm and Snapdeal could run parallel to its standalone India play, they suggest.
A comment on the latest development could not be had from digital wallet and online marketplace Paytm, where Alibaba has a majority shareholding.
Harish H V, partner (India leadership team), Grant Thornton, said Alibaba has substantial cash and is sure to make massive investments here. That will mean two big international players, the other being Amazon, competing in India. How the competition unfolds will depend on whether Alibaba comes alone into e-commerce or along with the companies where it has already invested, such as Paytm and Snapdeal. Reports suggested it considered investing in Flipkart, too, which the latter denied.
"If Alibaba actually enters India in tie-ups with the other e-commerce companies, the sector could well split into two camps-Amazon versus the rest,'' the consultant said, adding this was only one of the scenarios. However, this looks unlikely. Most leading companies have been talking of a long-term play in this space. Also, these companies command steep valuation.
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