AliExpress is a strategic arm of Alibaba portal that has supposedly entered an Indian market to offer the mouth watering deals that existing Indian e-commerce player such as Flipkart and Snapdeal are not been able to match. According to the sources, the prices that AliExpress is offering presently is one-sixth of the existing cost that the Indian e-commerce retailers are offering at the moment. If you are a regular online buyer then you must read this.
According to the story published by the TOI, a Delhi-based advertising professional was searching for the best deal on 64GB pen drives for his son but you will be surprised to know that he did not search the best deal on Flipkart, Amazon or Snapdeal he purchased it directly from China via AliExpress an online shopping portal of Chinese e-commerce giant Alibaba.
The story was in the news for quite some time that Alibaba is planning to enter the Indian market but with this news it has been confirmed that they have already done so. According to Mr. Malhotra, the drive cost him only Rs. 250/- that is one-sixth of the price that has been presently offered by the Indian e-commerce players.
Although according to Malhotra, there is a catch in it, the product got delivered to him after 45 days but it was worth saving more than 1000 rupees. “The delivery was not instant but it does not matter as I saved more than 1000 rupees,” says Malhotra who also brought the iphone cable for just 1 dollar.
IPhone cable for 1 dollar might make you wonder if that is genuine or fake but according to Mr, Malhotra, all are made in China. He bought it quite some time back and he has no regrets about it. “I bought it last year and it’s still working,” he said.
According to the sources, there are many like Malhotra in India who do not mind waiting for over a month and not care about the original products and this where AliExpress comes in the picture.
“They (AliExpress) deliver over 40,000 products every month,” says one of the top officials of an e-commerce firm. “And that’s a conservative estimate,” he adds. From mobile and computer accessories to soft toys and artificial jewellery, Indian consumers are slowly getting hooked to Alibaba. “While most of the items shipped are low-ticket, ranging from Rs 200 to Rs 2,000 the maximum demand for such products is from tier III and IV towns,” adds the official. “And that’s what present e-commerce players in India are missing out.”
Now to justify the huge price difference the sources claimed that 90% of the electronic items are sourced by the e-commerce players in India from China. Indian sellers add up their margin after getting the products from China which adds up to the costing, besides that there are other additions such as logistic costs, Inventory holding cost, and taxes which causes into inflating of the prices.
Now if a Chinese supplier ships the same product directly, it would cost substantially less even after paying the customs duties. “Buyers end up paying almost 40% less than what any portal offers in India,” said the official adding that whenever Alibaba decides to directly foray into India, it would give the company an advantage over local players.
Alibaba is in the Indian market for a long time but it was dealing through the business houses in India. But the entry of AliExpress is the direct invasion of the Indian market by Alibaba claims the sources. According to the chairman of a retails consultancy agency Arvind Singhal, “Alibaba’s various platforms have been anyway used by small Indian businessmen for a number of years now,” he said. “Whether it is a small piece of machinery or some raw material, even after paying the import duty, it works out a lot cheaper than what you get here,” he added.
Mumbai-based logistic solutions provider MyPacco, which partnered with Alibaba last June to offer logistic solutions as part of Alibaba.com’s Trade Facilitation Centre (TFC) initiative, declined to comment. Alibaba.com’s TFC is a business-to-business platform for global wholesale trade, offering a one-stop solution for small and medium enterprises to meet their needs in finance, credit, and logistics.
This shows that AliExpress is here to stay and Indian E-commerce industry has a bigger challenge to face in the near future. There is a cold war going on between the excising e-commerce players in India and now they will be facing the new bigger and better player in this market. Nevertheless, having said that, Indian online consumer will surely have brighter days ahead.