For several years, Amazon, an American e-commerce and cloud computing company which is based in Seattle, Washington, and Alibaba, a Chinese e-commerce company that provides consumer to consumer, business to consumer and business to business sales services via the web portal, have been competing in the online consumer retail arena. Now, the two online behemoths are going head to head for India's business to business segment of the burgeoning e-commerce industry specifically the Rs19.13 lakh crore which is worth an estimated $287 billion.
Jeff Bezos, the founder, chairman and CEO of Amazon.com, had set up the wholesale arm, 'Amazon Wholesale' in India that runs the company's B2B portal, amazonbusiness.in back in 2013 which is infused with the Rs115 crore.
As for China's Alibaba Group Holding Limited, its portal has been operating since 2007 and has more than six million registered Indian buyers and sellers. They have also recently announced that the company has signed up with new partners in India, including, Kotak Mahindra Bank, IDFC Bank, logistics startup Delhivery, DHL, and Aditya Birla Finance, as a means to ensure a more efficient and lower cost service for its sellers.
For a number of years now, both Amazon and Alibaba have been indirectly competing for a share of Indian market. But now the struggle for India's B2B online retail market will increase in intensity due to the high stakes now involved.
One reason for heightened competition between the two companies is that India's market in that specific sphere of business to business online retail is expected to flourish at 2.5 times to Rs45 lakh crore by 2020.
Another reason is due to the fact that B2B e-commerce is far more profitable since it does not require heavy discounting, and sales volumes are far more substantial when compared to the B2C arena.