Alibaba has been thinking of internationalising and trading with the world’s second most populous nation after China since September 2014. That was when it began talking to online shopping business Snapdeal. Since these talks stalled, it appears to have been manoeuvring behind the scenes. It has now partnered with Taiwan’s Foxconn Technology Co. Ltd, and the deal brought with it a stake in Snapdeal.
Why the Snapdeal with Foxconn?
Foxconn is an electronics manufacturing company with headquarters in Taipei, assets of over US$70 billion and net income of US$3.5 billion. It employees 1.2 million people in Australia, Brazil, China, Europe (Hungary, Slovakia, Turkey, Czech Republic) India, Japan, Malaysia, Mexico, Pakistan, South Korea and the United States.
What Makes Snapdeal Special
Snapdeal is one of India’s largest online shopping sites. It began in 2010 as a daily deals business, but moved to becoming a marketplace in 2011. It features more than 100,000 sellers offering a total of 10 million products and ships to 5,000 Indian cities and towns. Its departments include mobiles, computers, cameras, home entertainment, appliances, fashion, home and kitchen, home and furniture, e-learning, and health and sports.
Alibaba Following the Chinese Trend
An increasing number of China brands are looking at expanding to India. With China, this has a population four times larger than the third most populous nation, the United States. The prospect of doubling the size of market place and capitalising on India’s booming e-population offers opportunities for making mega billions in years to come.
Snapdeal Chasing Huge Potential
Snapdeal has its own rivals for India e-business, with Flipkart and Amazon deeply into the market. While only one in six Indians own smartphones these are shipping in at rate that exceeded 20 million in the last quarter. This suggests that the 50 million middle-class households are ripe for the plucking by e-platforms including Snapdeal.