Alibaba Eyes Joint Venture with big Indian companies

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An e-commerce giant Alibaba and the Chinese internet have aroused talks with the influential Indian conglomerates in order to boost its multi-channel or omni-channel retailing plans in the world’s sixth largest economy. According to the sources, they said that the senior executives from Alibaba have dicussed with Reliance Industries which is led by Mukesh Ambani, Tata Group and Kishore Biyani’s Future Retail in the current month in a bid to speed up their India push.

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While Alibaba’s discussions with the RIL it also held talks with Noel Tata the chairman of Trent, and the former chairman of Tata Group Mr. Cyrus Mistry. Tata, Future and RIL have the significant retailing footprint that would bolster the Alibaba’s omni channel blueprint in the country. The multi-channel and the omni-channel retailing provides the shoppers with consistent and seamless buying experience through online as well as offline stores. The company has also popularized its approach as  ‘online-to-offline’ (O2O) model in its home country. China is planning to board the offline users those might not purchase online. “Some of these talks are tentative and may not even progress,” said one of the people cited earlier in the report.

The talks revolved a joint venture with broader alliance with Alibaba thereby picking up the stake in retail entities of all the large Indian groups. Few days prior to this, Biyani said that he can close the deal with the foreign investors in the upcoming couple of months but he did not reveal the name of the alliance partner. It is also understood from the sources that Alibaba’s American rival Amazon is in talks with the Biyani in order to acquire the stake in Future Retail. The Reliance Industries and Tata did not respond to the queries posted with the questionnaire and Alibaba had to remain silent during the press.

Another person said that Alibaba has drawn up the list of possible partners and also said that the partner will be added in the “next few months”. Alibaba is accelerating its plans in India following Walmart’s $16-billion acquisition of Flipkart and Amazon’s rapid strides those are backed by $5-billion investments. Alibaba, which clocked profits of $10 billion on revenues of nearly $40 billion in fiscal 2017-18, holds significant stake in Paytm Mall, which has made sedate progress in a fiercely competitive market. Despite the backing of Alibaba and SoftBank, Paytm Mall clocks about one lakh daily shipments, which is much less than Amazon and Flipkart that are doing about four lakh daily shipments.

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Alibaba has pushed the Noida-based company to approach the market with an O2O model, unlike other existing players who largely rely on a mix of inventory and marketplace model in India. Besides Paytm Mall, Alibaba holds stakes in BigBasket, Zomato and TicketNew. It plans to bring these investments into the proposed new partnership to tap synergies, the people added. RIL runs Reliance Retail, which in turn has a plethora of businesses and is working on its own omni-channel strategy in tandem with Reliance Jio. While Alibaba is impressed by RIL’s ambitious plans, it is unclear if India’s most-valued company would want to induct a foreign partner right now.

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Like RIL, it is unclear whether Tata is ready to bring in an overseas partner in its retail business. Tata Group chairman N Chandrasekaran is focused on scaling up and integrating the physical and digital retail platforms. The conglomerate’s retail is spread across Titan, Trent (Star Bazaar), Infiniti Retail (Croma) and Tata Unistore (CLiQ), among other companies.

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