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Alibaba eyes India entry

News, 22 March 2016

NEW DELHI: The fast-moving world of Indian e-commerce is set for another major shake-up as Alibaba looks to set up business in a market projected to increase by 78% this year.

Senior executives of the Chinese internet giant have recently met with the chairman of Tata Group to explore a possible partnership.

A person with knowledge of that meeting told the Economic Times that "it will take two quarters for Alibaba to finalise a joint venture partner. It may or may not go with the Tata Group in the end but they are definitely talking".

The source suggested that discussions would have covered a range of areas, from online retail to logistics, offline stores and omnichannel support. "India is set for a big consolidation in ecommerce," they added.

Tata itself is currently in the process of setting up its own e-commerce operation: it claims that Tata Unistore will be "a unique omni-channel in e-retail", offering more than 200 international and domestic brands and with an initial 200 "omni-enabled" stores across India along with an app and web presence.

A recent report from ASSOCHAM and consulting firm PwC indicated that the country's e-commerce market was growing faster than ever as it expected that average online purchases would increase by 78% in the year ahead, up from growth of 66% in 2015.

It attributed this to "attractive deals and aggressive marketing of [an] ever-expanding range of merchandise from clothes to jewellery, from electronics to books".

Some 55m consumers made an online purchase in 2015 and the number is expected to grow by almost half again this year, rising 45% to 80m, helped by better infrastructure in terms of logistics, broadband and the increased penetration of internet-ready devices such as tablets and smartphones.

The share of e-commerce accounted for by mobile phones is set to more than double over the next couple of years, from 11% today to 25% by 2017, according to the ASSOCHAM report.

Data sourced from Economic Times; additional content by Warc staff