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E-commerce war hots up as Chinese take on Indian products

May 25, 2015 09:35 IST

At a time when Prime Minister Narendra Modi's government is urging domestic and international companies to 'Make in India', Chinese merchants are making plans to go deeper with 'Made in China' products in the Indian e-commerce sector. 

A prominent Chinese business-to-business (B2B) e-commerce company founded by Diane Wang, DHgate, has entered into an agreement with Gurgaon-based to sell products on the latter's website.

DHgate plans to list its products across categories, including electronics, accessories, beauty products and sports on Shopclues, which hosts retailers through the marketplace format.   

DHgate's move to make inroads into the Indian market through a local tie-up has come ahead of a similar step expected from its larger rival Alibaba.

At present, Jack Ma-backed Alibaba is present in the B2B space in this country in a limited way and plans to increase its India play through a partnership with Noida-based m-commerce platform Paytm.

Ant Financial Services, an arm of Alibaba, had recently picked a stake in One97, the company that owns and runs Paytm. 

Chinese e-commerce companies, being fuelled by multiple rounds of funding by marquee investors, have ambitious foreign expansion plans and see India as a potential market.

Reports estimate that China's cross-border e-commerce trade in 2016 will touch 6.5 trillion yuan, almost double of that in 2013.      

Recently, Modi was in China, where 'Make in India' was among his key talking points with the chief executive officers of top Chinese companies.

DHgate spokesperson and Senior Director (operations) T T Wang said the company was pleased to make a foray into the Indian market.

"It's (Shopclues's) wide reach in tier-I, -II and -III cities of India will help us establish an expansive network of sales in the country," the senior director of operations said.

Shopclues co-founder and Chief Executive Officer Sanjay Sethi said the tie-up would provide access to Indian consumers to buy products from Chinese merchants and vice-versa.

"The (Chinese) merchants will get access to the huge Indian market. As part of the agreement, DHgate would get a certain range of commission depending on various aspects of the categories that are available on our marketplace now," Sethi told Business Standard.

The company will start with seven to eight categories for DHgate merchants and is likely to double the number of categories in the coming months.

DHgate has merchants from across 230 countries but in the first phase of this partnership, Shopclues will enable access to Chinese merchants only.

"Our gross merchandise value is about $400 million and it is expected to increase to over $1 billion in the next 12 months. I expect at least 10 per cent of it to come from the partnership with DHgate," Sethi said.

Shopclues has about 16 million listed products with 13 million merchants on its platform.

A step ahead

Digbijay Mishra in New Delhi
Source: source image