Alibaba planning to enter the Indian market this year

The Alibaba Group plans to expand its presence in India this year, highlighting the South Asian nation's importance to China's largest online retailer.

Alibaba Group president Michael Evans and global managing director K Guru Gowrappan met Communications and IT minister Ravi Shankar Prasad on Friday and underlined the company's interest in India.

"Alibaba is very keen on coming to India in a very big way, particularly in the ecommerce sector," a senior government official said. "They're only exploring the way - whether to go on their own or set up shop with someone else."

The Chinese company plans to enter the ecommerce business in India in 2016, PTI reported, citing Evans.

"Ecommerce is a rising phenomenon in India, growing at 50% plus, with a huge catchment area, which shows the potential of a big aspirational market, Prasad said after the meeting. "We will give them (Alibaba) full cooperation."

The Alibaba executives suggested focus on the offline market in India, alongside the online, and posed questions about delivery platforms.

"They're most welcome to adopt the same (online and offline) strategy in India, too," Prasad said. "They can look at setting up their own (delivery platforms) or use the time and tested postal service."

Alibaba has already made significant investments in India's ecommerce sector. It owns a majority stake in ecommerce company Paytm and a small stake in Snapdeal, among the top local etailers.

The Chinese company has often compared India favourably with its home market. It has said that over 16 years ago when Alibaba started, China went from becoming a no-Internet country to one of the most advanced ecommerce ecosystems in the world. India is at a much advanced stage and growing at a very fast rate compared with the China of those times. Founder Jack Ma visited India three times in one year and also met the prime minister.

Ecommerce in India is likely to be worth $38 billion by the end of 2016, a 67% jump from a year ago and a 10-fold jump since 2009, according to industry body Assocham. It said revenue will grow five-fold to seven-fold during this period.

"Increasing Internet and mobile penetration, growing acceptability of online payments and favourable demographics have provided the ecommerce sector in India the unique opportunity to companies to connect with their customers," Assocham said in its latest report.

Image credit: Indiatimes