China investment giant Alibaba, who has been creating a stiff competition for already established e-commerce players such as Amazon and Flipkart in India, now planning to integrate its portfolio companies to up the ante against these firms.
As per a report published in ET, the Jack Ma-led retail behemoth is looking to integrate its recently funded e-grocer BigBasket and Pune-based logistics firm Xpressbees with partially owned e-commerce firm Paytm Mall, an arm of Indian payments major Paytm.
The proposed plan is expected to roll out in the next three-four months. Meanwhile, Paytm Mall is in the process of integrating BigBasket store on its web and mobile app.
According to Amit Sinha, CEO at Paytm Mall, BigBasket who recently got backing of $300 million from Alibaba has a complementary set of offerings for Paytm Mall. The firm will work on a full basket rate and BigBasket will play a role in fulfillment.
On the other hand, Xpressbees, a logistics business spun out of baby and maternity products retailer FirstCry has got Rs 224 crore from the Chinese conglomerate. XpressBees will work with Paytm Mall, who is also an investor in the SAIF Partners and IDG Ventures-backed firm to co-develop logistics solutions to achieve optimisation and seamless delivery experience.
How this integration impacts Alibaba ecosystem
As India is considered as one of the fastest growing e-commerce countries, Internet companies and global investors are throwing extra effort to capture the market. Flipkart, backed by SoftBank and Jeff Bezos-led Amazon are already pushing the limits to the next level for other investors.
For Alibaba, Amazon is the prime competitor as far as investment is concerned. While Amazon had sworn in over $5 billion in its Indian arm, Alibaba is reportedly planning to deploy about $8 billion over the next four years.
Both Alibaba and SoftBank are the common investor in the Vijay Shekhar Sharma-led e-commerce-cum-payment firm.
Meanwhile, Paytm Mall is also eyeing third round of investment of around $500-600 million from SoftBank. Besides SoftBank, the company had also held a discussion with US-based investors to participate in the round.
To spruce-up its platform play for O2O ecosystem, Paytm consolidated hyperlocal deal space in India by acquiring Little and Nearbuy in December last year.
This integration of Paytm Mall and BigBasket powered by XpressBees will jointly compete with e-commerce behemoth Flipkart and Amazon India. Importantly, Flipkart had made a re-entry in grocery last year while Amazon retails grocery and FMCG products through Amazon Now and ‘pantry’ category on its portal.
Grocery and FMCG products drive a major chunk of Paytm Mall’s overall volume. With the aforementioned partnerships, it sets to touch 60 per cent orders alone from the two categories.