Why Is India Less Valuable To Ali Than Southeast Asian Market?

What is the hottest market in the world in the past two years? Of course, India! India is known as "China five years ago".

Ali and other large companies crowded into India.

India is now the biggest piece of fat in the eyes of major companies.

However, reporters believe that for Ali, the current India market is actually not fat, but chicken ribs. Instead of spending money and energy in India, it is better to concentrate attention and try hard to seize the Southeast Asian market.

So why does India have huge demographic and mobile Internet dividends, and the value of Ali is not as good as that of the Southeast Asian market?

For Ali, the India market is just looking good.

According to the world clothing shoes and hats net, I believe that your expectations of India market have been much higher.

What "354 million netizens will reach 6.57 billion billion by 2019", "the retail market last year was 600 billion dollars, and the electricity supplier market was 20 billion dollars."

This information is a tempting for investors.

It was also under this temptation that Alibaba began investing in the electricity business in India last year, and spent $500 million to invest in Snapdeal, one of India's largest e-commerce platforms.

But then Ali has no big moves. Recently, Ali has bought rumors of Snapdeal. Ali came out second days to clarify that there was no takeover intention and no acquisition negotiations.

Why? Because Ali plunged into the India electricity supplier market and found that things were far from being simple, and they were in a very passive position.

Ali missed the best time to enter the India market.

As a foreign electricity supplier, how can we gain a foothold in the India market? The timing of entering the market is very important, and Ali is too late.

Look at the situation when Amazon entered the India market three years ago.

India's local electricity providers have made preparations for Amazon: finding out some challenges faced by the industry in the local market, initially creating a logistics delivery facilities system, and gaining consumers' recognition of the electricity supplier's mode and products.

But at the same time, these local enterprises have failed to overcome these challenges and create their own products.

To establish its stable market dominance has left Amazon an "opportunity".

The India government, which has been strictly controlling the retail business, has opened up the online retailer market to foreign suppliers since the second half of 2014.

Amazon has seized this rare opportunity and invested $5 billion in succession. It has been "close hand to hand" for several years, such as Flipkart and Snapdeal, which have been relying on capital markets "blood supply" and insufficient funds.

Today, Ali's market structure is quite different: Although the market share of statistics shows that Flipkart accounts for 47%, Amazon accounts for 20-30% and Snapdeal accounts for 10%, Amazon's development momentum is far stronger than expected.

Flipkart has been known as the first electricity supplier in India. It was once regarded as the most valuable Internet Co in India. At the peak, its valuation reached 15 billion US dollars. However, the valuation of the capital market is continuing to decline. The main reason is that since the second half of 2014, Flipkart, Snapdeal and Amazon have taken turns in advertising, discounts and logistics, competing for consumers and businesses, and the capital consumption is very fast. Flipkart and Snapdeal have been fighting for a long price war between them and Amazon, and Flipkart and Snapdeal have been losing money. India has also suffered from capital cold this year.

Amazon's sales in July this year were reportedly more than Flipkart, and Amazon also made clear that it would cost Flipkart to squeeze India into the top electricity supplier.

In today's severe financing environment, Flipkart and Snapdeal are in danger.

Ali's investment in Snapdeal is even worse. Snapdeal has not been able to catch up with Flipkart in terms of the amount of financing, valuation, application downloads, seller's impression and so on. Snapdeal has no own logistics, habits are low price and profitability is even weaker.

After the capital fever subsided, Snapdeal had to cut down on discounts and advertising investment, and sales fell sharply.

Last month, Snapdeal was again writedowns by Japan Telecom and Internet giant Softbank group. It was widely rumored that Snapdeal was discussing merger with Flipkart and Amazon.

The decline of Snapdeal has been obvious.

As Kartik Hosanagar, Professor of technology and digital business at the Walton School of business, University of Pennsylvania, said, "at present, all companies in the India electricity supplier industry are losing blood.

Because of fierce market competition, many commodity categories are very low and gross margins are often negative.

If Ali buy Snapdeal at this time, waiting for Ali to be a three - defeated, protracted price war, a huge marketing battle and a market that doesn't know when to start a profit, this is not what Ali wants.

As Cai Chongxin, executive vice chairman of the board of directors of Ali in early November, publicly expressed in Hongkong, "for now, Alibaba group will not compete positively with Amazon".

In such a situation, it is difficult to get a share of the India market through Snapdeal. How can Ali break through? Learn Amazon and go to the battle in person. This is even more difficult.

Chinese companies such as Amazon and Uber can develop smoothly in India, thanks largely to the convenience brought by India's English language environment to the localization of American companies. For example, when Uber enters India market, it only needs to provide an English version. But with ALI, localization becomes a big problem.

In addition, in recent years, the capital of India's start-ups has basically come from European and American funds. Chinese enterprises have only started investing in India since last year, let alone India, a consumer and economic and political complex.

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In other words, even if Ali can catch up with Amazon and Flipkart within a year or so, according to the "India manufacturing" plan of India's Moody's government, the boycott of China made by India's Diwali festival in November, and the call of Flipkart joint taxi software company Ola this month to India government's protection of local start-up companies, it is not impossible for India to launch a protectionist movement. The India government will not allow two foreign electricity providers to occupy the market.

In other words, if we change Amazon into Amazon today, we may not win anything in India.

Therefore, the India electricity market for Ali is already chicken ribs.

What is the direction of Ali's internationalization strategy? Reporters believe that the Southeast Asian market is playing, and Ali and India spend in vain, so we should go all out to seize the Southeast Asian market.

Why is the Southeast Asian market more suitable for Ali?

It's still a matter of timing and pattern.

Ali obviously absorbed India's experiences and lessons, and entered the Southeast Asian market in front of Amazon.

This year, when Ali bought the first electricity supplier Lazada in Southeast Asia for 1 billion US dollars, the electricity supplier in Southeast Asia is still in the bud: the retail sales account for only 1.1% of the total retail sales, and there is great potential for development. In Southeast Asia, the retail sales of e-commerce in 2015 amounted to $5 billion 200 million, an increase of 63.8%. No matter the local electricity supplier or foreign electricity supplier, there was no match for Lazada in the market.

The number of Lazada itself is very beautiful: the number of active users in Malaysia, Indonesia, Philippines, Singapore, Thailand and Vietnam is 10 million 400 thousand, the annual compound growth rate of the total number of users is 278%, the number of active users only accounts for 1.9% of the total population in Southeast Asia, so there is still room for growth; the volume of pactions has increased from 1 million 300 thousand in 2013 to 19 million in 2015, and the volume of pactions in 2015 has reached 1 billion 300 million US dollars; in September this year, shipments in Indonesia increased by 2.5% compared with a year ago; from Ali's earnings report, last quarter, Ali accounted for 2% of the international retail business in Ali, while in the quarter after joining the Lazada, the figure doubled to 4%.

At present, the biggest problem in Southeast Asia's electricity supplier market is logistics and payment. These two "kill" many Southeast Asian local electricity providers are also the main culprits. They also have the ability to "destroy" foreign electricity providers: the capital rich Japanese electric giant, Lotte, concluded its business in Singapore, Malaysia and Indonesia at the beginning of this year, and sold its Thailand electricity supplier Tarad, which was acquired in 2009.

What is the fate of Ali? Sorry, logistics is the strength of Lazada, and payment is the strength of Ali.

Lazada operates 12 warehouses and 92 distribution centers that directly deliver goods to buyers, as well as more than 100 logistics partners. Recently, it has formed a cooperative relationship with China Post and CJ Korea express company.

In early November, Lazada acquired Redmart, Singapore's retail express service start-up company to enhance its logistics service level.

Before the end of the first half of 2017, RedMart planned to shorten the delivery time to 4-6 hours (now basically the next day).

In the second half of the year, RedMart will provide express service so that it will deliver groceries within one or two hours of receiving online orders.

Redmart business and technical capability will become a powerful weapon for Lazada to fully develop its own logistics in Southeast Asia.

In terms of payment, it is expected that Lazada will introduce Alipay into Indonesia this month to solve the problem of payment.

It is reported that Amazon will enter the Southeast Asian market early next year, so Amazon and Lazada will have a tough battle.

If Amazon continues to use the price war and marketing strategy in the India market, winning geometry? Lazada has its own strong home advantage and logistics system, with Ali's successful experience of defeating Amazon in the Chinese market, and the full support of Ali in terms of payment and capital.

Moreover, unlike the India government and consumers, the Southeast Asian race and culture are closer to China and have more Chinese. This is a natural advantage for Ali, but not for American companies such as Amazon.

It is not impossible to re play Ali's long-standing suppression of Amazon's drama in the Chinese market.

Reporters feel that Cai Chongxin's "Alibaba group will not compete positively with Amazon" argument is worth pondering: why does Ali not have a "market exchange" negotiations with Amazon - Ali quit the India market, Amazon does not enter the Southeast Asian market.

Of course, this is just a joke.

But no matter from the analysis of India market or Southeast Asian market, now it is time for Ali to converge attention and go all out to "cultivate" Southeast Asian market. This is the way out for the internationalization of Ali.

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