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Why is Alibaba launching B2C e-comm venture via UCWeb in India?


Update: UCWeb pointed out inaccuracy in PTI  report, which claimed that  it has been launching e-comm platform in India. Instead, the company said that the new initiative would adopt a content platform model for promoting and supporting e-commerce players through a business solution in India. 

Alibaba hasn’t given up on Indian e-commerce. After testing it through investments in Snapdeal and Paytm, the Chinese conglomerate is set to launch its own e-commerce business through its subsidiary UCWeb.

According to its Global Business Vice President Huaiyuan Yang, UCWeb will launch the wholly-owned marketplace this year. He didn’t share the exact timeline for the launch.

While there are no further details about the DNA of the upcoming e-commerce venture, it appears to be a consumer-facing marketplace as UCWeb has several B2C products, including browser and content.

Yang emphasised that the venture wouldn’t impact its portfolio Paytm and Paytm Mall in India, where Jack Ma-led group has over 30% stake. “E-commerce is a very vast business. There are various parts of e-commerce business and several products. UC will choose section according to our business,” he quoted by PTI.

The platform would also sell movie tickets. If it does so, the venture would directly compete with Paytm. Currently, Paytm has a substantial business in movie and entertainment ticketing segments.

The move is the second strong signal about losing the faith of Alibaba Group in Paym Mall. Earlier this year, it didn’t participate in the funding round solely executed by eBay. The decision to launch B2C e-commerce further corroborates the report of Alibaba halting big-ticket-size fresh investments in India.

At present, Alibaba Group has a presence in B2B and B2C segments via Alibaba and Ali Express in India. Paytm along with its ecosystem is likely to help UCWeb in rolling out its upcoming e-commerce venture.

Meanwhile, the bigger question is why Alibaba is keen to have e-commerce play via UCWeb?

There is no clear answer to this at the moment. The only merit we can see is — UCWeb has a lot of traffic in India, and it’s exploring chances of converting them in transactions. Anyway, it’s not easy to do so.

Give that Alibaba’s group didn’t get much success through investments in consumer-facing horizontal e-commerce bets,  its solo foray in one of the fledgling e-commerce markets would be exciting to watch out for.

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