Walmart’s acquisition of Flipkart has spurred Chinese giant Alibaba into some increased activity of its own in expanding its business interests in India. It had done one round of exploration earlier and is learnt to have re-entered the talks and discussions on creating an omni-channel retailing venture in India possibly jointly with one of the large players already established here.
There only three that count, the Reliance Group with its multiple-segment retail networks in the offline space; the Future Group, again present in more than one product segment and the Tatas whose offline presence is equally diverse from watches to fashion. Alibaba can choose a multi-channel approach as well. It is still a long way to go before any firm decision could be arrived at with any of these groups having their own priorities and business objectives.
The interesting factor to be highlighted here is that Alibaba has a substantial stake in Paytm Mall, which is also in the online retail space. It is learnt that Paytm is being pressured by Alibaba to explore ways to switch to the O2O model to boost its operations and revenues. To place the performance of Paytm Mall in perspective, against the volume of about 4 lakh daily shipments or orders being handled by the 2 majors, Amazon and Flipkart each, Paytm Mall is able to do only 1 lakh shipments in a day.
The reports also indicate that if the proposed arrangement in any form with the three large groups mentioned above does not materialize, Alibaba has already lined up a Plan B. Besides, there is also the proposed takeover of the More Supermarket chain owned by the Adithya Birla Group. Godman Sachs and Samira Capital could be the partners in that deal as and when it does happen.
Alibaba has a highly successful business going with $40 billion in revenues and $10 billion as profits. It has been very keen on the Indian market has made huge investments in the country. As mentioned, Paytm is one big startup in its portfolio. The other big names are Zomato, BigBasket, TicketNew and so on.