Foreign firms rush to India’s online marketplace

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

India’s booming online marketplace business has attracted a new wave of merchants and sellers from countries such as China, South Korea, Japan, Singapore and the US. In fact, thousands of sellers are getting into tie-ups with Indian e-commerce players to kick-start operations in the country.

 

According to industry insiders, around 50,000 sellers from China, South Korea and Singapore are planning to enter India through online marketplace players.

 

“In business-to-business (B2B) segment, there is no online organised player in the country right now. The market is being created for the online businesses,” said Sanjay Sethi, co-founder and CEO of Shopclues. The company has brought in DHgate, the second largest player in China after Alibaba, on to its platform. It’s also getting 25,000 South Korean merchants on board. Tie-ups are also in process with Singapore Traders Association to enable them to sell on Shopclues.

 

American retail major Walmart is also exploring ways to tie up with leading e-commerce companies in India, including Flipkart, Snapdeal, ShopClues, Grofers and Bigbasket. It is learnt that German wholesale giant Metro Cash and Carry is also in talks with e-commerce marketplace players to sell its products online.

 

Meanwhile, e-commerce giant Alibaba is looking to make a big bang entry into India’s marketplace via One97 Communications-owned Paytm.

 

Alibaba is expected to be the support behind Paytm’s China product portfolio. With that in place, Paytm will aim to become the biggest Indian player insofar as the number of sellers on the platform is concerned. With eight million sellers, Alibaba has the widest seller range as well as product portfolio.

 

This is not for the first time that Paytm is planning to sell Alibaba’s product range. During Diwali last year, Paytm had the whole product catalogue sourced from Alibaba and merchants from China were directly shipping products to customers in India, saving Paytm the hassle of finding warehouses.

 

As for the second top player in China, DHgate, online B2B would be a gateway into India and an opportunity to get connected to 350,000 sellers through the Shopclues portal.

 

DHgate plans to list its products across categories, including electronics, accessories, beauty products and sports. “From China we are getting around 10,000 SKUs (stock keeping units) listed. It is not a retail business and the target audience for this business are other businesses in India,” said Sethi.

 

The foreign investment rules vary across retail platforms and companies often resort to complex structuring to bypass policy. While foreign direct investment (FDI) is capped at 51 per cent in multi-brand retail with states having the last say on whether international players would be permitted to operate or not, there’s no limit of foreign investment in single-brand and business-to-business or cash and carry.

 

In e-commerce, however, FDI is not permitted. But, e-commerce players are mostly run with foreign money by operating marketplace platforms, where rules have not been framed yet.

Source: http://www.business-standard.com/article/companies/foreign-firms-rush-to-india-s-online-marketplace-116020100015_1.html

Indian economy can grow at 9 per cent for a decade: Professor Lawrence Summers

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs | 0

India has the potential to grow at 9 per cent for a decade and 8 per cent in subsequent years if the country takes bold reform measures, eminent economist and Harvard University professor Lawrence Summers said today.

“Except India, major emerging economies seem to be losing momentum… I think if India maximises its potential, it could grow at 9 per cent for a decade, and 8 per cent a decade after that, and 7.5 per cent for a decade after that,” Summers said during a session at the Hindustan Times Leadership Summit.

Summers, who is president Emeritus and Charles W Eliot professor at Harvard University said he is very optimistic about the capacity of India but the country needs bolder reforms.

“… 9 per cent growth, decline by 0.5 per cent to 1 per cent every decade, that is my sense about India’s potential that is not my forecast for India because India would have to reform more boldly and take a whole set of steps not just at the national level but at the level of states, and even at the level of culture if it wants to achieve that potential,” he said.

Quoting IMF, Summers said India is projected to be the fastest growing economy in the world over next 5 years.

Summers’ statement assumes significance as India’s economy grew at 7.4 per cent during July-September this fiscal year, more than China’s growth rate at 6.9 per cent.

Summers, who was also US Treasury Secretary, said India should not blindly follow the so called Tiger’s economies growth model and it should give more stress in developing its services sector.

“I think India can do lot to promote manufacturing. But I don’t think it is reasonable to think India should follow South Korea’s export-led growth model.

“India has different potential and it should concentrate more on services sector,” he said.

Summers also stressed on the need of speedier and predictable decision-making in India.

“Speedy decision-making has never been an Indian hallmark. There is still too much of sense in India, that being well-connected is particularly very important in the country. If this can be worked on, nothing like it,” Summers said.

Asked whether the US Fed should raise interest rates, he said, “It is very clear. Given the current context, there isn’t any other alternative to raising interest rates,” he said.

Source: http://economictimes.indiatimes.com/news/economy/indicators/indian-economy-can-grow-at-9-per-cent-for-a-decade-professor-lawrence-summers/articleshow/50055050.cms