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India’s Top E-Commerce Execs Squabble Over Alibaba Entry
As tensions between e-commerce companies reach a feverish pitch in India, two of the county’s biggest executives took to Twitter on Friday evening in a public spat over a possible Alibaba entry.
Sachin Bansal, the executive chairman of India’s biggest e-commerce platform Flipkart, tweeted: “Alibaba deciding to start operations directly shows how badly their Indian investments have done so far.”
The comment was aimed at companies including Flipkart rival Snapdeal, which was backed by Alibaba in a $500 million USD funding round last year. The two Indian companies are engaged in a fierce battle fueled by subsidies, much like China’s on-demand market, though on a smaller scale.
Snapdeal founder Kunal Bahl served a biting retort to Mr. Bansal’s comment, saying “Didn’t Morgan Stanley just flush five billion worth market cap in Flipkart down the toilet. Focus on your business, not commentary.” Last month Flipkart’s shares were devalued 27% by Morgan Stanley’s managed mutual fund on the back of significant year-over-year losses.
The scuffle demonstrates the heightened level of competition in the Indian e-commerce sector, which has led several companies to seek revenue in less-crowded South Asian markets.
Despite the squeeze, India’s e-commerce potential is still largely untapped, and Alibaba has made no secret of the fact they are looking for entry points. Last year the Chinese company’s financial arm, Ant Financial, invested $500 million USD in a 40 percent stake in One97 Communications, the parent company behind leading online payment app PayTM.
Alibaba’s own payment service, Alipay, was one of the big contributors to the company’s growth, funneling consumers to Ali-backed e-commerce platforms. An increased commitment to PayTM signals a similar strategy in India.
Earlier this month a former Alibaba executive, Bhushan Patil, joined PayTM as a vice president. Mr. Patil’s focus will be on expanding PayTM’s e-commerce business and cross-border operations, similar to his role working on Alibaba.com.
Currently Alibaba’s influence in the Indian market remains indirect, though it’s enough to rile up the country’s leading e-commerce executives. An Alibaba entry would almost certainly spur further consolidation in the market.