Further fueling speculations of its imminent entry into the Indian market, Chinese e-commerce major Alibaba Group is establishing its first office in the country in Mumbai.
Jack Ma-owned Alibaba is setting up an office at Bandra-Kurla Complex (BKC) in Mumbai, reports Business Standard. The company has rented 3,221 sq ft of office space at Platina and would pay Rs 275 per sq ft on a monthly basis, the report said.
Alibaba's biggest rival Amazon India too has a 30,000 sq ft head office in the same BKC area.
NYSE-listed Alibaba Group Holding, along with its financial-services arm Ant Financial, has invested a significant amount of capital in One97 Communications Pvt Ltd, the company that also runs mobile payment and commerce platform Paytm.
In August, Paytm had created two separate entities christened Paytm E-Commerce Pvt. Ltd and Paytm Payments Bank Ltd under which its e-commerce and banking services will operate. VCCircle had reported that Alibaba's stake in One97 Communications will be transferred to Paytm E-commerce.
Alibaba owns a string of e-commerce properties in China and is the largest online and mobile commerce company in the world in terms of gross merchandise value (GMV). Ant Financial runs Alipay, a mobile payments wallet like Paytm.
In India, Alibaba also holds a minority stake in another e-commerce company, Snapdeal.
Alibaba had shared its plans to enter India earlier this year when it said the company is looking at opportunities to build the business organically or through other means. "We have been exploring very carefully the e-commerce opportunity in this country, which we think is very exciting on the backdrop of Digital India," Alibaba Group President J Michael Evans had said.
Jack Ma, founder of Alibaba and one of the richest persons in China with a fortune of about $24 billion, founded the e-commerce company in 1999 in Hangzhou, capital of east China's Zhejiang province.
NYSE-listed Alibaba reported strong revenue growth for the second quarter led by its core business as well as the digital media and entertainment segment.
Revenue rose 55% to 34.29 billion yuan, or $5.14 billion, for the three months through September 2016 from 22.17 billion yuan, or $3.49 billion. The rise in dollar terms is lower because the greenback has strengthened against the Chinese currency during the period.
Revenue from the company's core commerce business rose 41% year-on-year to 28.49 billion yuan. Sales from the cloud computing business climbed 130% to about 1.5 billion yuan while revenue from the media and entertainment segment surged four-fold to 3.6 billion yuan.
The e-commerce market in India is largely ruled by home-grown Flipkart and US-based Amazon Inc besides a number of other players such as Snapdeal, Paytm and Shopclues. For Alibaba, it would take significant investments and a long-term strategy to grab a substantial market share in the country's fast growing e-commerce business.