Open Sesame, India! Alibaba’s coming

World’s biggest B2B company is scouting for local ‘partners’ - and acquisitions

HONG KONG: India’s numerous treasures are evidently too tempting to resist for the Alibaba of the dot-com age. The world’s biggest business-to-business (B2B) portal, which has vanquished heavyweight multinationals and established itself as the e-commerce emperor of China, is looking for new worlds to conquer, perhaps as early as next year. And India, it appears, is firmly in its sights 

“India is definitely on our radar,” Alibaba.com’s CEO Jack Ma said in Hong Kong on Thursday, in response to a question from DNA Money.

“And I think that given Alibaba’s business model, and given the fact that India and China are so similar - with lots of groups of manufacturers and suppliers - India will be a successful market.”  Turn to Page 22

Outlining his global vision for Alibaba, Ma said that for an Internet company, going global wasn’t a matter of choice but an imperative. “It’s not that we want to go global; we have to, or we’ll be in trouble.” 

Using an earthy metaphor from his student days to explain the compelling need for Alibaba to widen its canvas, he said that suppliers of products who used his B2B platform were like college boys at a dance party. Buyers, in turn, were like college girls.

“Typically, at such parties, there are more boys than girls, and this gender mismatch creates problems.” Similarly, today, China’s suppliers need more buyers, and in his estimation this opened up new business avenues. “I strongly believe that China - and India - have much more e-commerce potential than the US, given their populations and demographic profiles.”

So, how would Alibaba go about expanding operations in India? Would it look for acquisitions?

“Perhaps the best way is for us to find a local partner,” said Ma. “That also fits in with our global plan - that we find local partners, let them mainly control the business, and we keep the knowhow. We’ve seen what ebay did in China, and they’ve not been so successful. We’d like to promote local entrepreneurship.”

Even so, Alibaba would be scouting for acquisitions, said Ma, but acknowledged that Alibaba’s ‘do-it-yourself’ culture was a bit of an impediment. Having demonstrably proved their success with successive launches of Alibaba.com <http://Alibaba.com>, the internet auction site TaoBao and the e-payment facilitator Alipay, the people at Alibaba tended to believe that “we should do everything by ourselves.” 

But that, said Ma, was “a wrong concept”. The year gone by, in which Alibaba acquired Yahoo China as part of a $1 billion deal under which Yahoo bought a 40% stake in Alibaba, had been very educative, he said.

“Last year, I greyed considerably because I had had no experience in integration. But I’m richer for the experience, and even if it means getting a few more grey hairs, we’ll acquire another company because that is the way to go global, that is the way to develop. We have no choice.”

When Alibaba reaches out beyond the Chinese market it knows so well, would it be beaten on alien turf by other players? “It’s very possible that when we go global, we will have setbacks,” conceded Ma. “But that’s the challenge… If we want to go to India, we have to make sure that Indian people want our Alibaba business. Then again, Alibaba could be a different B2B in India… I think we have to have an open mind about that.”

So, did he have a timeline for coming to India’s doorstep and saying the magic incantation ‘Open Sesame’? “Last year, if it hadn’t been for our Yahoo acquisition, we would have begun going out,” said Ma. “It was a very busy year, but now may be a good time to think about it.”