Looking to invest in an Indian logistics Company, one that specialises in deliveries for online retail players, Alibaba Group Holdings in end-talks with Delhivery and Xpressbees Logistics, reports ET.
Jack Ma, the founder of Alibaba considers e-commerce, logistics and payments as the ‘iron triangle’ of business. The company seems to follow this in competing with current biggies of the market, Amazon and Flipkart.
The Chinese company and its affiliate Ant Financial together own about a 40% stake in Paytm. This stake would help them to get Paytm to spin off its marketplace business and top it up with more capital, according to ET.
The sources also revealed that Alibaba is likely to buy a majority or a significant minority stake in a logistics company, letting them run the operations majorly . The investment will be decided in 4-6 months, once the Chinese company is ready to launch its horizontal marketplace platform in India.
Both Delhivery and XpressBees already work with Paytm’s marketplace as third-party logistics and eKYC partners. Major players should always secure their logistics capabilities before advancing their business growth.
Top executives from Delhivery and XpressBees have met the team which Alibaba has set up for the India entry. This group is led by Alibaba’s Global Managing Director K Guru Gowrappan and Bharati Balakrishnan, the first top executive hired by Alibaba to build a consumer-facing business in India.
India is fast turning into a battleground for big online marketplace players, mostly between Amazon and Alibaba after the former has lost the battle in China. After Amazon announced $3 million dollars in the Indian market, it was Alibaba’s turn to make a move. According to Internet and Mobile Association of India, the e-commerce market is estimated to be worth Rs 2.1 lakh crore by December 2016.
So, fundamentally Alibaba will buy and start with Paytm’s online retail business, as a deal with Flipkart fell owing to its expensiveness. Getting a logistics partner to build a network like Amazon is the priority now as the company looks to expand its global customer base.