In contrast to Amazon, which is investing to grow organically, Alibaba is looking to to build its position in the Indian e-commerce market by way of acquisitions. Reports suggest that the latter company is currently in talks with Shopclues. Valued at $1 billion, Shopclues is India’s online flea market, selling cheaper unbranded products to value shoppers. Alibaba already holds a 40% stake in Indian online payments company Paytm, which also has a small e-commerce arm. Alibaba is now looking to acquire a strong e-commerce player in the region to better establish its presence. We believe the Indian e-commerce market will likely experience strong growth in the next decade and can be a key growth driver for Alibaba. However, competition from Amazon and local giant Flipkart is tough and Alibaba’s strategy to use key acquisitions to establish itself in the region can quicken its pace of growth in the region.
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