Hot on the heels of warming India China relations and 6 weeks prior to Indian Prime Minister Narendra Modi’s first official visit as India’s head of state to Beijing, Ma’s presence in Delhi has already got global chatter waves going.
In a closed door meeting with Mr. Modi, who the Chinese view as their ticket to a large market, huge returns on investments and scalable growth, Ma marketed B2B’s as a force to help empower smaller businesses and grow the market. At a time when the Indian government is toying with the idea of Foreign Direct Investments in the retail sector at the cost of upsetting smaller shops, B2B’s can be the ideal force to grow the market. And who better to assist the Indian market than Alibaba, the big daddy of B2B’s whose already proved highly successful in a similar market to India.
When Ma was in Delhi in February this year, he mentioned he was keen to invest more in India, work with Indian entrepreneurs and technology companies. A large chunk of Alibaba’s sellers ranging from spices to tea are now in India and Ma is keen to capture their market. As a result, Ma is exploring strategic investments not just in Indian online retail firms, but also in business-to-business e-tailing, logistics, payments services companies, etc.
Ma has already invested 25 percent in Indian payment gateway Paytm last year. As a result of his keen interest in China’s southern neighbour, expect to see him earn some frequent flyer miles between Delhi and Beijing this year. “Over the next three years, one of the key strategies for Alibaba is to globalise and to make sure that we can help more small businesses around the globe, use our services to do businesses,” Ma had said at a business event. Analysts clued into the market expect Ma to strategically build an ecosystem of services much like he did in China.
Besides the business-to-business trading platform, alibaba.com, the group has entities such as online payment escrow service Alipay; consumer-to-consumer online shopping platform Taobao Marketplace; tmall.com, an online retail platform to complement Taobao; group shopping website juhuasuan.com; comparison shopping website eTao.com; third-party online payment platform Alipay, e-commerce data mining and processing platform Alibaba Cloud Computing; and AliExpress, an online retail service for small Chinese businesses. “Had a very good meeting with Jack Ma,” Modi tweeted post the meeting.
Ma is China’s richest citizen with a fortune of about US$24.4 billion and has spawned a generation of entrepreneurs after he started Alibaba in 1999 in Hangzhou a small town 2 hours from Shanghai and listed it on the NYSE, raising. According to recent research from Frost & Sullivan, Alibaba is a pioneer of B2B eCommerce with gross merchandise value of US$27.28 billion, about 11 percent of their total; this dominant leadership position in a market expected to grow to US$6.7 trillion in gross merchandise value by 2020. This trend will make the B2B eCommerce market two times bigger than the B2C market (US$3.2 trillion) within that time frame. Further, The B2B market is forecast to reach nearly US$225bn by 2018, with the US and China key growth markets.