Why is China's Alibaba Investing in India’s e-Commerce Market?

Why is China's Alibaba Investing in India’s e-Commerce Market?

The number of smartphone-using Indians runs into millions and they are the key growth drivers of India’s burgeoning e-commerce sector.

Quartz quotes technology consultancy firm Forrester Research which reports that by 2016, more online commerce consumers will make their purchases from mobile phones, instead of desktops, and by 2019, the total mobile commerce sales could reach $19 billion even as the overall online commerce industry grows to over $100 billion.

Mobile Commerce in India
Mobile Commerce in India

Backed by over 80 million smartphones, the total value of transactions through mobile phones in India grew from $1.25 billion in 2012-13 to $5.79 billion in 2013-14, according to data from Google and Forrester Researcha staggering increase of 383% in one year! By 2016, India is slated to become the world’s second largest smartphone market due to falling mobile phone prices and cheaper data services.

These projections are part of the reason why Chinese e-commerce giant Alibaba made its first big investment in India earlier this month. Ant Financial Services Group, an affiliate of the Alibaba Groupbought a 25% stake in One97 Communications, a company based in Noida in the state of Uttar Pradesh in India. One97 runs Paytm, India’s largest digital goods marketplace. Paytm is also a payment solutions provider to e-commerce merchants using its Reserve Bank of India-approved semi-closed wallet. The company has more than 23 million customers.


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