In an attempt to make its venture a success in the Indian market, Chinese e-commerce supergiant Alibaba, is looking to invest in Indian logistics company Delhivery and Xpressbees. Alibaba, which was rumoured to be interested in the Indian star e-commerce company Flipkart, has reached the decision to invest into logistics company before it forays into the Indian market to strengthen its logistical arm. The proposal to buy Flipkart didn’t go through as it proved to be a bit too costly for the Chinese behemoth.
This investment in the logistics company will complete Jack Ma’s “Iron Triangle” of business as Alibaba and its affiliate already own 40% stake in the Noida based E-commerce company which makes up the other two pillars of the “Iron triangle” namely business and payment. Alibaba is looking to cash on Paytm’s already established e-commerce and payment processing business. There are also talks of topping Paytm with additional funds to help it tackle its business rivals Flipkart and Amazon. Top executives from both Delhivery and Xpressbees are said to have met with K Guru Gowrappan, Alibaba’s global managing Director and Bharati Balakrishnan, Alibaba’s first top Indian executive. The announcement is expected to come in 4-6 months as Alibaba closes in on its launch of the horizontal marketplace platform in India. In a statement issued to ET, Alibaba said that it sees “tremendous opportunities” in India. “We are absolutely committed to developing in this market for long term” the statement said. The announcement has come as a relief for Delhivery which was in deep waters after Flipkart opened its logistics arm, Ekart for public.
It will be interesting to see how Flipkart and Amazon reacts to Alibaba’s entry into the $10Bn Indian E-commerce market. Amazon, which was left dissipated by Alibaba in the Chinese market has planned to invest additional $3bn fund to counter Alibaba while Flipkart is still counting on its loyal customer base as of now.