How an Alibaba arm offers mouth-watering deals that Indian e-commerce players can't

When Sumit Malhotra, a Delhi-based advertising professional, wanted to buy a 64GB pendrive for his son, he didn’t hunt for the best deal on Flipkart, Amazon, or Snapdeal. Neither did he call his office stationery person. He got it directly from China — via AliExpress, an online shopping arm of Chinese e-commerce giant Alibaba.

Reason: It cost him merely one-sixth — Rs 250 — of what was being offered by Indian e-commerce players. But there’s a catch. The pendrive was not delivered at an express pace — it took 45 days! "I ended up saving a cool 1,000 bucks," says 38-year-old Malhotra, who also bought an iPhone cable for just a dollar.

An iPhone cable for $1? Was it genuine or fake? After all, Made in China is also synonymous with Fake in China. But Malhotra isn’t complaining. "I bought it last year and it’s still working."


There are many like Malhotra in India who do not mind waiting for over a month nor care about the originality of the product. And that’s where AliExpress has scored. "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."

How does one explain the huge price difference? It’s simple math, he says. As far as electronics items are concerned, over 90% of them are sourced from China. An Indian seller, after getting the product from China, adds to it his margin, logistics cost, inventory holding cost and other taxes, which inflate its price. Now if a Chinese supplier ships the same product directly, it would cost substantially less even after paying the custom duties. "Buyers end up paying almost 40% less than what any portal offers in India," says the official, adding that whenever Alibaba decides to directly foray into India, it would give the company an advantage over local players.



Retail experts, though, are not surprised with the numbers churned out by AliExpress. Alibaba’s various platforms have been anyway used by small Indian businessmen for a number of years now, says Arvind Singhal, chairman of retail consultancy Technopak. 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 adds. 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.