 "Jack Ma in India: Alibaba founder to meet Snapdeal chief, is a deal in the offing?")
Jack Ma, fresh off the success of the US listing of China’s biggest e-commerce company Alibaba, is in India from today and among the many meetings he will be having with entrepreneurs here, the one with Snapdeal’s Kunal Bahl will be the most closely watched.
Ma, who’s reportedly in India as part of a 99-member business delegation from his home town of Zhejiang, could meet with Bahl while in India, reported the Economic Times . Both companies have refused to comment on themeeting.
There have been earlier reports of Alibaba considering an investment in Snapdeal, that often projects itself as being the Indian version of the Chinese behemoth, but there has been no deal announced between the two companies so far.
Alibaba and Snapdeal may bea good business fit for the simple reason that both of them seem to be pursuing the same business model of being technology companies that offer buyers and sellers a marketplace.
Snapdealf ounder Kunal Bahl has said in the past that they are very open about the fact that the e-commerce company is modelled on the lines of Alibaba.
“If Alibaba in China, which is the business we are most similar to, generates $5 billion EBITDA a year, there is a reason for it. They are not a retailer, they are a technology platform and that gives me confidence that in due course… we will see similar economics emerging out of our company as well,” Bahl told CNBC-TV18.
Another similarity is that Japanese companySoftbank has invested heavily in both companies.
Alibaba already has a presence in the Indian market with a B2B model, which it started in 2010, but currently does negligible business in the country. Flush with funds from its US listing, it is seen as been looking to re-enter the market through Snapdeal. But, India may be very tiny part in Alibaba’s map of larger acquisitions.
The e-commerce giant has been on a shopping spree this year. Alibaba has invested in or bought multiple companies both in China and abroad.
Given that Alibaba already controls about 80 percent of the e-commerce in China, it is but natural for the company to be keen on India, especially if it wants to compete with global e-commerce firm Amazon ona global level.
Since Alibaba already runs China’s two most popular online shopping sites, Taobao and Tmall, it makes more sense for the company to buy rather than build in India in order to get scale.But whether it will be Snapdeal that will be the beneficiary of Alibaba’s global growth ambitions we’ll know soon enough.