Alibaba Pours USD 10 Million into Indian Logistics Platform Xpressbees
Alibaba continues to invest big in India, expanding its stake in Xpressbees.
China e-commerce giant Alibaba (BABA: NYSE) has invested USD 10 million into logistics startup Xpressbees, which represents an extension of the company's funding round series D.
In late 2017, Alibaba invested USD 35 million into Xpressbees's funding round series D. With this latest fundraising, the Indian firm's total funding is raised to over USD 167 million, accounting for more than six rounds.
Founded in 2015 by Amitava Saha and Supam Maheshwari, the logistics company describes itself as one of the leading delivering service providers in India, with more than half a million shipments per day and over 2000 offices and services centers across the world. Other services provided by the firm include cross-border services, logistics solutions, payment collection, and fulfillment services.
India is experiencing an aggressive "invasion" from Chinese behemoths such as Alibaba, Tencent, ByteDance, and Xiaomi, with these pouring billions of dollars into Indian startups.
The internet giant Tencent has so far invested more than USD 2 billion in multiple Indian startups, from online shopping platform Flipkart, Ridesharing firm Ola to food delivery service provider Swiggy. Meanwhile the famous TikTok from ByteDance, with more than 120 million MAU in the region (according to Sensor Tower), has been striving to expand its short video platform across the region since it was temporarily banned by the Indian government. However, once it was stated in the court that the ban could result in a loss of 500,000 users per day and job losses of 250, a Madras court removed the ban on TikTok, according to TechCrunch.
Alibaba's capital flows into the India market could be understood as a strategic plan to escape the "poor" Chinese economic growth and grab a big stake of Indian "mines." Therefore, it's not measuring the amount of capital it invests in the world’s second-most populous country. From the digital payment to the logistics sector, Alibaba entered the South Asian market through its subsidiary Alipay. Recently, jointly with SoftBank, they injected USD 1 billion into mobile payment Paytm. In 2017, the Chinese conglomerate poured USD 200 million into the e-commerce platform Paytm Mall. Other investments include the logistics firm Snapdeal (USD 500 million) and entertainment firm TicketNew (USD 30 million).
The flourishing e-commerce industry in India has attracted some major world investors to the logistics sector. Domestic rivals like Delhivery, a logistics startup firm, received a Series F funding round worth USD 413 million from Softbank. In May, the American investment bank Golden Sachs injected USD 150 million into Blackbuck, which had previously grabbed USD 20 million from Sequoia Capital India and USD 7 million from Temasek backed Venture Capital firm Innoven Capital, according to Crunchbase statistics.
The market size of the Indian logistics sector is expected to reach USD 215 billion by 2020, from the present level of USD 160 billion, with a CGAR of 10.5%, according to an India Brand Equity Foundation (IBEF) report.
More Chinese investors are expected to bet big in the Indian market as China's economy slows down and India experiences high Internet and smartphone penetration, led in particular by Chinese phone makers Xiaomi and Vivo.