The Chinese ecommerce king, Alibaba, has made it no secret that they plan to expand into various areas of the world, with hopes of becoming the dominant ecommerce player in the world. However, despite this goal, it seems that the company has halted their expansion into India.
For the past year, Alibaba has been purchasing stock into various companies of India, including smartphones and the like. With the hopes that eventually Alibaba would become a huge factor in India’s ecommerce market. However, with the newest accusations against Alibaba of counterfeit products, among many other issues, the company has put a halt onto their expansion project.
The Deal that Will Not Be
Though Alibaba has slowed down all of their growth into the Indian market, one particular deal that has been halted is the stake that they planned to take in Micromax. This company is one of the biggest smartphone makers in India according to the revenue that the company brings in. So what has happened? Many people understand the accusations that are being held against Alibaba, however, the company does not seem to be as worried about them as others in their shoes may have been.
A source that is familiar with the thinking of Alibaba has stated:
“They have become much less aggressive.”
Could it be that Alibaba, specifically Jack Ma, is now thinking that enough is enough?
Since Alibaba first had an interest in expanding into India, there have been a few investments made into companies. They have took a forty percent stake in PayTM, a payment site start up at the cost of $680 million. They also took up small stakes in an online marketplace called Snapdeal.
The Fear for Alibaba
Chinese regulators are cracking down on the accusations against Alibaba. They want results, and it seems that Alibaba is starting to devote more time to taking these claims seriously. After all, they are getting sued by several luxury brands for counterfeits that are offered throughout their sites. In addition, they recently were accused of bullying vendors on Singles Day to only sell via Alibaba rather than JD.com, accusations that JD.com wants the world to realize.
Read more about JD.com’s accusations against Alibaba here
Founder of Marbridge Consulting, based in Beijing, Mark Natkin stated:
“The slowing economy and more regulatory pressure certainly have Alibaba pulling its focus back to the domestic market.”
However, as Muxhi Li, an analyst at Arete Research in Hong Kong stated:
“Alibaba probably can benefit more from efforts to defend their existing market in China, rather than investing overseas.”
Otherwise, the ecommerce king of China may lose their prestigious place.
Read how Alibaba dominated Singles Day in China here