Alibaba cometh? But Bharat may be far behind

The big story this week suggests that Chinese e-commerce giant Alibaba has been in talks with Reliance Retail Ltd  for a  joint venture challenging Flipkart and Amazon, and seeing an investment of around $5-6 billion by Alibaba.

Walmart’s $16 billion acquisition of Flipkart, the world’s biggest purchase of an ecommerce company,  marks a watershed vote of confidence in India’s growing online sales market, so more exciting deals are likely to follow sooner or later.

Thriller by Jack Ma (photo by TPG/Getty Images)

Alibaba has been pursuing the online-to-offline (O2O) approach in China where actually like in India an overwhelming majority of customers still buy from fragmented, brick and mortar stores.

Here too it makes sense for Alibaba to pursue a synergistic alliance with a large retail entity, to provide seamless O2O buying experience. Other than Reliance, the Chinese giant has been reported to have held discussions with Tata Group and Future Retail.

But research conducted by Google, Bain & Company and  Omidyar Network has given a new twist to India’s ecommerce story.

Shelley Singh reports in ET, “Regular online shoppers in India are around 50 million, but almost the same number of Indians have stopped online shopping in the last 12 months. And lost business from the 50 million dropping out is around $50 billion.”

Above research shows that over the last year as many as 54 million users stopped online transaction after making their first purchase. They appear from lower income groups, uncomfortable in English,  discouraged by the very touch and feel of online shopping.

Through multi-channel retailing, vernacular online platforms etc ecommerce giants have to find ways to connect with Bharat — where their lost business looks like $50 billion and growing.