BENGALURU: Alibaba Group Holdings, is expected to buy, or invest in, an Indian logistics company expertise in deliveries for online retail players, and towards this end has held talks with Delhivery and Xpressbees Logistics, according to the sources.
The Chinese company is also planning to get Paytm to spin off its marketplace business and decides to top it up with more capital, according to the sources. Alibaba and its affiliate Ant Financial together own about a 40% stake in the Noida-based company.
Delhivery and XpressBees have already worked with Paytm’s marketplace as third-party logistics and eKYC partners. Securing control over logistics is important because infrastructure comprising roads, storage, and vehicular assets, as well as skills, regulations, and systems are relatively underdeveloped in India, informed Devangshu Dutta, CEO of a retail consultancy.
“Major players such as Amazon, Alibaba, Flipkart have to take direct or indirect control to ensure that their logistics capabilities evolve ahead of their own business growth curve,” he stated. Top executives from Delhivery and XpressBees have met the team, which Alibaba has set up for the India entry. This group is headed by K Guru Gowrappan and Bharati Balakrishnan, Alibaba’s Global Managing Director, the first top executive hired by Alibaba to build a consumer-facing business in India.
Delhivery was estimated to be valued at two thousand crores during its last funding round. SAIF Partners and IDG Ventures are among the investors in Xpressbees, whose evaluation is not known.
“They are putting their strategy in place. Fundamentally, they will buy and start with Paytm’s online retail business, because a deal with Flipkart is not happening right now as they feel it is very expensive. They will get a logistics partner to build a network like Amazon, which is very critical,” according to the sources.
“All payments will be moved to the payments bank and e-commerce will be a separate entity which Alibaba will invest in again. We will see some announcements over the next three to six months,” according to the sources. As India becomes a major battleground for the largest two online retailers throughout the globe, they are deploying contrasting strategies in an eCommerce market that Internet and Mobile Association of India estimates will be worth more than two crores by December 2016.
Alibaba in investment talks with Indian Logistics firms, Delhivery and Xpressbees
