Alibaba now has two weapons in India for a proxy war with Amazon

Tech in Asia reports that Alibaba is fighting the e-commerce war in India by proxy, with investments in local rivals of Amazon

India has restrictions on foreign direct investment (FDI) in e-commerce, which limits Amazon India to being a marketplace for third-party sellers. Alibaba and Japan’s Rakuten, which opened a development center in India last year, seem wary of following the Amazon path. For now, Alibaba seems content to fight the e-commerce war by proxy, with investments in local rivals of Amazon.
 

Before investing in Snapdeal, Alibaba had made its first move with a stake in Paytm, a nimble player in the Indian mobile commerce space. Alibaba’s affiliate Ant Financial picked up a 25% stake in Paytm’s parent company One97 earlier this year for $700 million and is reported to be raising its stake to 40%.
 

Paytm is an early mover in the mobile payments space in India, with around 80 million digital wallets in the bag. Between Paytm and Snapdeal – along with its subsidiary FreeCharge – Alibaba now has a finger in the major mobile commerce players in this mobile-first market. It’s well-placed to make a pincer movement in India against its global rival Amazon.
 

What Alibaba brings to the table through its Indian partnerships is access to a vast Chinese market for sellers in India. As Jack Ma pointed out when he was in Delhi, Indian merchants are already the second biggest sellers on the Alibaba.com business-to-business marketplace after the Chinese. Indian tea, spices, and chocolates are hot sellers. The first two he could understand, but “I did not realize Indian chocolates were so popular,” said Ma, adding that it showed India has many great products to offer in the Chinese market.

This is an excerpt from Tech in Asia. You can read the full article here.