Alibaba India

A quick search of ‘ShopClues’ yesterday would have pointed the ecommerce firm as a potential acquisition target for Alibaba. News outlets such as Tech in Asia and Times of India have reported on the rumors of the Chinese ecommerce giant acquiring India’s newest unicorn.

Will Alibaba enter India? The story so far

Alibaba indeed has its eyes on India, but it will not enter through buying a stake in ShopClues, or its rival, Flipkart, contrary to the rumors of late.

According to Tech in Asia, a company spokesperson denied the rumors in an email.

We are not currently preparing any investment into ShopClues or Flipkart. India is an important emerging market with a great potential and we are committed to developing this market for the long term.

Alibaba Group views India as a ‘natural progression’ of its strategy to expand globally. No further comment was provided regarding the ecommrce giant’s future plans for India.

Earlier this year, Alibaba Group President J Michael Evans has acknowledged that the company has been ‘exploring ecommerce opportunities’ in the country, but again, no details were given.

According to Tech in Asia, the Chinese company’s entry into India is inevitable, and it has already held talks with various possible partners, according to multiple sources from the media site.

What is ShopClues?

ShopClues is India’s top online marketplace that sells mobile phones, laptops, home appliances, fashion, home products. The company was founded in California’s Silicon Valley in 2011.

Alibaba ShopClues

Alibaba rumored to be entering India through acquisition of online marketplace ShopClues. Source: mediainfoline.com

What would this mean for India’s ecommerce landscape?

Local media has been buzzing with news of a possible stake purchase in India’s leading ecommerce company, Flipkart. However, that rumor has too been shut down.

India’s ecommerce landscape is peppered with local players such as Flipkart and Snapdeal, and of course, Amazon. The global giant has been making strong pushes in the country, most recently launching Amazon Prime for Indian shoppers and setting up six new fulfillment centers across the country in July.

India is currently in a two-way race between home leader Flipkart and Amazon, with Snapdeal coming in third place. According to Tech in Asia, the top five ecommerce companies in India hold about 80% of the market, with Flipkart owning 50% of the market share. It seems that India’s ecomemrce landscape is heading towards a new level of growth, with only the big players making strides and battling each other.

If, and when Alibaba does make a play for India, it will put the ecommerce company directly head to head with Amazon. But as of now, more speculations of possible buyouts and acquisitions will indeed run rampant.

Versions of this appeared in Tech in Asia on August 18, read the full versions here and here.

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