Asia's fledgling e-commerce companies are inviting comparison with China's dominant online retailer. Lippo Group declares that its soon-to-be-launched MatahariMalls.com will become "the Alibaba of Indonesia"; Japan's SoftBank hails Snapdeal, valued at around $3 billion, as the "Alibaba of India". Such daring analogies are sometimes useful, but rarely flattering.
Using Jack Ma's $200-billion giant as a role model can be constructive for the business-to-consumer upstarts. Much like China seven years ago when Alibaba first launched its Tmall consumer retail site, markets such as India and Indonesia suffer from lacklustre retailers, low internet penetration, fragmented competition, and fractured logistics. It's, therefore, no coincidence that Snapdeal's founders developed an online marketplace similar to Alibaba's after a trip to China. MatahariMalls.com claims inspiration from Alibaba's "online to offline" experiment - where customers order on the web but take delivery from a traditional shop.
Dropping such a well-known name is also convenient shorthand for luring investors in search of the next big thing. That seems to be working for Snapdeal - Alibaba itself is weighing an investment in the company, a source told Reuters on March 11.
Yet the comparison also smacks of hubris. The ambitious mini-mes aim to dominate their markets in the same way that their idol controls more than 60 per cent of Chinese online retailing. At first glance it may seem only a matter of time before the upstarts become similarly entrenched. Snapdeal and local rival Flipkart already control three-quarters of India's business-to-consumer e-commerce market, according to Morgan Stanley. In 2008, when internet penetration in China was around 20 per cent - similar to India and Indonesia today - Alibaba's Tmall accounted for just a fifth of the market.
But business history is unlikely to repeat itself. Alibaba built its near-monopoly in unusual circumstances: the Chinese government sheltered it and other native groups from external competition to such an extent that even US web giant Amazon now sells its goods through Tmall. Other countries are less protective. Amazon has moved into third place in India in less than two years. Lazada, owned by Germany's Rocket Internet, has overtaken more established local competitors in Indonesia.
There's still plenty of growth for the wannabes to chase. Gross online sales in ASEAN countries could increase fivefold to $35 billion by 2020, according to UBS. But unlike Alibaba, they'll need to learn to share.
