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Alibaba B2B Venture In India Sees 89 Percent Dip In Profit

Alibaba has not been able to make any significant inroads in the USD 500 billion online B2B (business to business) market in India. Alibaba posted a 73 percent jump in its revenues at Rs 27 crore in the fiscal ending March 31, 2018, as per its filing with Registrar of Companies. The company’s revenues come from the commissions it earns from the sellers.

The B2B venture was started in India 8 years ago. The company, which has been posting profits for the last few years, saw its profits decline by 89 percent at Rs 3 lakhs during the FY18 compared to Rs 25 lakhs in the year year-ago period. The profits have declined as the company’s expenses during the fiscal almost doubled at Rs 27 crore.

However, it is interesting to note that Alibaba, which has made billions of dollars’ worth of investments in e-commerce s player such as Paytm, has not spent much on its own B2B subsidiary headquartered in Mumbai. In the last 8 years, the company has not made any significant additions or investments in ramping up its business and the team. According to the RoC report, the company has about 20 employees and does not have a dedicated website for the Indian market.

Compared to Alibaba, its global arch rival Amazon has been investing heavily both in its consumer facing and B2B business. Amazon had recently announced the expansion of its Global Selling programme by launching B2B selling for Indian exporters.

Amazon also has a B2B wholesale business called Amazon Wholesale, the company’s B2B wholesale distributor and has already crossed sales worth USD 1 billion, according to the RoC filings for 2016.

Meanwhile, Indian B2B companies such as Ratan Tata-backed Moglix and IndiaMart are growing at a fast rate in the domestic market, which is expected to reach USD 700 billion (Rs 51,00,000 crore) by 2020 on back of the Indian government’s Make in India and Digital India initiatives.— The Hindu Business Line

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