Alibaba has decided to increase its stake in the Indian market by picking up an e-commerce logistics company for its next round of investment. XpressBees is a Pune based e-commerce logistics startup, which is logistics arm of many companies. The war of Indian e-commerce is not going to stop as big players have jumped into it with their deep pocket.
Amazon has invested heavily in its logistics arm named Amazon Transportation Services through various channels from The USA to Malaysia. Flipkart on the other hand invested in its logistics business eKart. Alibaba has already a string of heavy investment in the PayTm, PayTm Mall, BigBasket and TicketNew. More than a billion dollar already invested in the Indian market is proof of the emerging trends in the economic growth in the Indian startup business.
It is the sixth largest internet company in the world. India being the most favourable market of the choice, investors across the globe are bullish about the future growth in the Indian economy. The online retail sector has seen massive growth in the recent decade thanks to the increased penetration of the internet and improved infrastructure.
According to a report, the online logistics technology businesses is estimated to be 9.6 billion dollars by 2020. The massive growth is the result of the large scale of disposable income and increasing trust among people for the digital space.
Alibaba and XpressBees
XpressBees is currently handling 170,000 to 200,000 orders per day. With an investment from Alibaba, can increase the capability to compete with other contenders in the logistics space. The other companies in this space are Delhivery, Ecom etc. XpressBees is founded by Supam Maheshwari and Amitava Saha.
It is operated under the Busybees logistics solutions. They are also the founders of the FirstCry. Some suggest that we will see major consolidation once the big money moves in the market. Many small firms have established themselves in this niche market but the problem with the logistics in the Indian scenario remains the same as large-scale infrastructure investment is required from the government side.
As seen in many reports in the media, the process of investment is in the last stage. The bigger players have their own logistics chain, so it seems quite obvious that they are trying to bring a comprehensive solution in the retail market by controlling each element of the retail value chain.
The Deal Of Future
Not entirely new to the logistics business, they have come a long way since 2012 when they launched their logistics startup which was spun off from their parent business of the first cry. The talks of investment have been going on for more than a year, and it seems that it may have finally a happy ending.
Two of the founders now look into the separate business of logistics and first cry. They have already investment partner as SAIF Partners, IDG Ventures India, NEA, Vertex Ventures and Valiant Capital.Alibaba is likely to get closer into the Indian market as it grows its investment portfolio in the Indian economy. We are bound to see more investment in the online retail sector.