The War for Supremacy in the Indian e-Commerce Space Could be Fought between Amazon and Alibaba

9 Mar

By Mudit Mohilay, The Tech Portal

India is a great place. And it’s advantages are even more apparent when you are an e-commerce behemoth looking to grow your presence. Which is why the country is host to a whole bunch of e-commerce companies battling it out with each other for supremacy. Well, as per a recent report, the final battle shall be fought out between Amazon and Alibaba.

India has a huge online population. And even better is the fact that this population is only slated to grow in the future as Internet penetration increases. As per the Internet and Mobile Association of India, this online population is expected to reach somewhere in excess of 450 million by June this year. To put things in perspective, the United States of America had a total population under 350 million at the last count.

While the US and China are currently the top spenders when it comes to online shopping, India is expected to make a name for itself as the value of online sales in the country reaches $48 billion by 2020. This data comes from  analyst firm Forrester.

Meanwhile, the Amazon-Alibaba rivalry has been coming to a head and it seems like these two companies may lead the opposing factions in the final battle for dominating the e-commerce space in the country. Sure, there are other players however, they appear to be giving way of late — even as Amazon and Alibaba, bear down upon the country.

E-commerce is a very unique battlefield and a major portion of tactics for gaining customers here involves offering discounts. Giving discounts isn’t really in the best interests of a company, more so when the company in question is still a startup and has yet to show a profit. Something similar happened with Flipkart and Snapdeal who got completely caught up in offering discounts in a bid to lure more customers. And guess where did the money come from? From investors of course.

Needless to say, such a course can not be maintained for a long time. Both Flipkart and Snapdeal are struggling to maintain their footing. While Fliipkart has been suffering from markdown after markdown, Snapdeal is attempting to balance things by laying off employees. And here is exactly where Amazon and Alibaba, both foreign companies with vast coffers, come in.

Take Alibaba for example. The company has invested in Snapdeal but of late, has been focusing quite a bit of its attention upon Paytm. The Chinese firm purchased a 36.31 percent stake of the latter’s e-commerce subsidiary for a $177 million sum. This comes in addition to the majority stakes it already has in Paytm’s parent firm, One 97 Communications, plus well nigh 40 percent of the Paytm business. So its probably safe to assume that Alibaba is calling a lot of shots for Paytm.

Of course, once Alibaba decided against moving to India with its own brand for now, Paytm was an obvious choice. The Chinese firm has always believed in laying down the roads in form of payments systems, before moving in with e-commerce. In China for instance, its Alipay platform is wildly popular. With all the resources at its disposal, Paytm can probably move ahead with impunity. Considering all the trouble most of the other major domestic players have been facing of late, they will be focusing more of their attention on setting things to rights.

Which leaves Amazon. One of the few foreign e-retailers of have a significant brand following, Amazon also has significant funds at its disposal. It could of course back another company however, it seems to be content with doubling down on its growth through new advertising campaigns etc. In light of all these facts, it is probably a matter of time before Amazon and Alibaba start slugging it out with each other in earnest. Either way, the e-commerce scenario in Inidia is likely experience some very interesting movements in the near future

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