Smartphones help rise in e-commerce across India

PLANS BY ALIBABA TO BOOST ITS PRESENCE IS A SIGN OF THE VAST OPPORTUNITY

IN THE COUNTRY’S BLOSSOMING ONLINE SECTOR

By AN BAIJIE in Beijing

Looking for trustworthy suppliers of agricultural produce in India can be tough job for Fan Chengliang, a Chinese businessman who exports Indian species to China. Fan,40, launched his business in March last year in suburban Hyder abad, a city in southern India with a population of more than 6 million. During the harvest season, he had to travel hundreds of miles every day to purchase peppers from the local dealers. “ For newcomers like me, it’s difficult to appraise whether a supplier is credible or not, ” Fan says. “ It always takes a long period to establish trust worthy relationships with local businessmen. ” However, finding reliable suppliers using online business-to –business services is expected to become easier for businessmen like Fan, after Alibaba Group, China’s largest e-commerce company, recently announced it plans to boost its investment in India.

On Nov 25, Jack Ma, the founder and chairman of Alibaba, said while visiting India that the nation with the world’s second largest population offered huge potential for e-commerce. “ We will invest more in India, and we will work with Indian entrepreneurs and technology companies, ” 50-year-old Ma said at the India-China (Zhejiang) Business Cooperation Conference. Alibaba currently has a small presence in the Indian e-commerce market.    Ma, whose company is responsible for 80 percent of online retail sales China, made the announcement two months after Alibaba’s records initial public offering in New York raised $25 billion. “ In the next there years, on of the key strategies for Alibaba is to globalize, to ensure that more small business around the world use our services,” he said. According to Ma, Indian business have already become the second largest presence on Alibaba after Chinese companies, and roughly 400,000 Chinese customers buy goods including species, chocolates and tea from Indian sellers through the online platform.

Small business boost

           

There is huge scope for “ mutual engagement ” in technology between India and China, which could benefit many small business, Ma added. The economic times, a Mumbai based newspaper, said that during the visit, Ma was scheduled to meet with Kunal Bahl, the 31-year-old confounder of Snapdeal.com, which styles it self as the Indian version of Alibaba. Snapdeal, founded in 2010, has become the fastest-growing and largest online market place in India, with more than 25 million registered users and 50,000 business sellers. In October, Japan’s SoftBank, the largest shareholder in Alibaba, pumped $627 million into Snapdeal to become the largest investor in the Indian online company as well. Gu Jianbing, public relations director of Alibaba, did not confirm if a meeting took place between Ma and Bahl. It remain unclear how alibaba willcooperate with its India partners.

          

The Indian government does not allow foreign direct investment in business-to-consumer e-commerce, but it does so in market places where third-party sellers sell directly to shoppers through e-commerce platforms.     The online sales market in India is still at an early stage compared with China According to Technopak Advisors, a New Delhi-based consulting company, the online trade volume in India was about $2 billion in 2013. The number was $300 billion in China at the same period. However, the large population of young people in India has made the market more promising and attractive for  investors like Alibaba.

 Mobile shopping

         

The cheap smartphones that are popular in India are also expected to boost the country’s online trade volume. Bahl recently told Tencent, one of China’s biggest Internet firms, that about 65 percent of Snapdeal’s current sales were reached through mobile phones, far more than the 5 percent of only a year ago. In India, smartphones are being sold in rural areas where “ even the safety of purified water could not be guaranteed. ” Bahl told Tence. Competition in the Indian e-commerce market has become fiercer with companies like Amazon, which entered India in 2013, strring up the industry. Wal-Mart India has also taken its cash-and-carry wholesale stores into the virtual space, allowing customers to order online for home delivery.

           

India’s aggressive homegrown companies such as Flipkart, a leading e-commerce website launched in 2007, have also become powerful competitors. In June, Flipkart raised $1 billion in new capital to support its expansion, especially in mobile technology. Flipkart says it has 22 million registered users and handles 5 milion shipments per month. ” The number of visitors on FLipkart.com greater than the population of the top 10 Indian cities, ” says the introduction on the company’s official website. For Fan, the Chinese businessman, the rapid growth of the Indian e-commerce market means more choice when he selects business parters. “ If can get more information about the suppliers through the Internet, I will not have to travel hundreds of miles every day during the harvest season, enduring the stimulant smell of pepperes,” he says.          

ChinaDaily - February8,2015