Amazon (AMZN), Alibaba (BABA) Bullish On India’s $300bn B2B Market

Amazon.com (AMZN) Amazon

Amazon.com, Inc. and Alibaba Group Holding Ltd are competing for a share in India’s billion dollar business-to-consumer (B2C) e-commerce market, according to a report published in Quartz. Amazon operates its business directly through Amazon.in, and has been investing heavily in India.

The Chinese e-commerce giant Alibaba operates Alibaba.com, which has more than 6 million registered Indian buyers and sellers. The Chinese company is planning to enter the Indian market through series of acquisitions. Both e-commerce are trying hard to win in India’s $287 billion B2B e-commerce segment.

Amazon.com, Inc. (NASDAQ:AMZN) Jeff Bezos

Amazon Bullish On India

Amazon has emerged as the second-largest online marketplace in shipments in India, according to a report by Market Realist. The online retailer managed to grow its share in 2016 compared to the last year. At the time, Flipkart and Snapdeal, in which Alibaba owns a stake, have saw declines in their market shares.

Amazon sees a “huge potential in the Indian economy,” where the e-commerce behemoth is planning to invest about $5 billion. The online retailer employees more than 40,000 people in the country.

To gain a share in the Indian e-commerce wholesale market, the online retailer setup Amazon Wholesale (India) in 2013. Amazon Wholesale, the company’s wholesale business unit in India, runs and manages amazonbusiness.in. The B2B portal is designed cater to small offices, department stores, drugstores, clinics, hospitals, hotels, and restaurants. However, the wholesale service is available only in Bengaluru and Mangaluru in the southern Indian state of Karnataka.

In a letter to shareholders earlier this year, Amazon CEO Jeff Bezos explained how his company is working to promote e-commerce in India. The online retailer, Bezos said, built tools that empower entrepreneurs in 172 countries to reach customers in 189 countries last year.

Alibaba Betting Big On India

Alibaba Group Holding Ltd plans to enter the Indian market through series of acquisitions. According to reports, the company has been in talks to acquire online marketplace ShopClues.com, which has been valued at about $1 billion.

Alibaba.com has been operating in India since 2007 and has more than 6 million registered Indian buyers and sellers. The company recently signed up new partners in India to provide better and cheaper services for its members. Its new partners in India include Kotak Mahindra Bank, IDFC Bank, logistics startup Delhivery, DHL, and Aditya Birla Finance. The new partners will provide banking, transactional, lending, international logistics, and domestic courier services to Alibaba.com’s members on priority and at special pricing, according to Quartz.

India’s B2B e-commerce market is expected to reach $700 billion by 2020 whereas the B2C e-commerce market is expected to $102 billion by 2020, according to Ibef.org.

The fight for India’s e-commerce market will be “mainly between Amazon and Alibaba, with the contours of the battle likely to be clearer in about a year, Vijay Shekhar Sharma, CEO of Paytm, told The Economic Times.

In other Amazon news, Morgan Stanley said that the company’s shares will inch closer to the $1,000 mark due to Amazon Prime’s surging popularity. The e-commerce giant is building a wind farm that will be able to produce around 253 megawatts of electricity.

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