Alibaba To Expand Global Footprints In India

Alibaba will soon expand its reach to the Indian e-commerce market.

It is clear now that Alibaba Group Holding is pushing to expand its presence in the Indian e-commerce market. The company said that it would not expand its operations in the foreign market until it has made name there, which is why it is focused to make deals and acquisitions in the region. Sources report that the e-commerce giant is all set to expand its existence in India this year as it goes on to highlight India’s importance to China’s biggest online retailer.

The president of Alibaba Group, Michael Evans, and the global managing director K Guru Gowarappan recently met the Communications and IT minister of India, Ravi Shankar Prasad, in order to discuss the possibility of expansion and underline its interest in the region. A senior government officer said in a statement, “Alibaba is very keen on coming to India in a very big way, particularly in the ecommerce sector. They're only exploring the way - whether to go on their own or set up shop with someone else.”  

The main plan is to penetrate the online commercial business in India this year. Ravi Shankar said after the meeting that undoubtedly e-commerce is rising at a fast pace and it is a rising phenomenon in the region at this moment. He added that it is “growing at 50% plus, with a huge catchment area, which shows the potential of a big aspirational market.” The Communications and IT manager is pleased and said that Alibaba will have full cooperation from our side to grow and extend its business in the region.

The corporate executives focused on the offline market of India in the meeting. The company is willing to capitalize on the Online to Offline (O2O) market of the region first and then it suggested focus on the online and delivery platforms.

It is known that the Chinese conglomerate is currently focused to improve its presence in the O2O market back in China and it plans to do the same in the Indian region as well. Shankar Prasad added that the Chinese e-commerce leader is most welcome to begin with and adopt the similar strategy of O2O business in India too. India is a rising nation and many people are not used to being online, as the major digit push has still not happened. Hence Ravi Shankar Prasad added, “They can look at setting up their own (delivery platforms) or use the time and tested postal service.”

For that matter, a former Alibaba executive has also joined India’s online payment service PayTM. Alibaba is an investor in the online payment service since last year. Bhushan Patil who was one of the main members who was responsible to run the Alibaba.com platform has joined PayTM as a vice president. He will be in position to do the same thing which he did for Alibaba in his tenure.

Alibaba, Ali Fortune Acquires AGTech Holdings To Boost Lottery Business

Alibaba and its main financial affiliate spends $308 million to own nearly 60% of the AGTech Holdings to boost lottery businesses in China.

Reports published by Bloomberg suggest that Alibaba Group Holding, along with its financial affiliate, is willing to spend nearly $308 million (HK$ 2.39 billion) for its lottery business in China. Alibaba will be investing to have the control of AG Tech Holdings, which is listed in Hong Kong’s market but will help in boosting the lottery business of the company in its domestic market.

The main financial affiliate, which is majorly owned by the largest online retailer in China, is known as Ali Fortune Investment Holding. The deal suggests that the company has agreed to buy shares valued at HK$ 1.68 billion and convertible bonds valued at HK$ 712.6 million in AGTech Holding. According to its investment, Alibaba Group will have almost 59.45% ownership in the firm upon full conversion. This was confirmed by a regulatory filing to the Hong Kong Stock Exchange.

Recently, Alibaba asked numerous banks to raise an amount of up to $4 billion in order to fund its expansion plans. The firm is looking to expand in rural areas and improve its market status in international regions. It is currently focused to make an impact in the Indian market where it is directly taking on Amazon. However, it has not launched its own business in the foreign markets. It said to first create an image in the regions and then slowly expand for maximum results.

AGTech Holdings is already known for running lotteries in various provinces of China. With this acquisition, it seeks to further expand its game in the territory. This acquisition also means that Alibaba Group is returning to the profitable and moneymaking lottery businesses in China. Previously it was in this business but was forced to back out and stop operations because of severe restrictions imposed by the government.

AG Tech stated that it would expand its games, hardware, and distribution throughout China within the coming times. The company added that the lottery business of China had a participation rate of only 7.5% in 2013. It should be considered that this sector is strictly regulated as per the decision and restrictions of government. The Hong Kong’s lottery business participation rate in 2012 was 56%, which is impressive and showed signs of growth.

The leading e-commerce giant said that with its main financial affiliate, Alibaba Group will assist AG Tech with cloud computing.

Ali Fortune is a company majorly owned by Alibaba, which means that 60% of the main financial affiliate is with Alibaba Group whereas the remaining 40% is owned by Ant Financial, also known as Alipay’s operator ‘Zhejiang Ant Small & Micro Financial Services Group’.

Alibaba has been doing a tremendous business when it comes to e-commerce but its overall earnings and results were hurt because of its lottery business suspension. After a long time, it is all set to make it return in the business.