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Report: Alibaba eyes Indian data center launch

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Could be prelude to Alibaba realizing e-commerce ambitions in India

Chinese e-commerce giant Alibaba Group may be set to enter the Indian market with a new data center, according to a report by The Hindu Business Line.

Alibaba is the world’s largest retailer, and it opening its own local data center would be a useful prelude to launcing in India’s e-commerce market later this year. Business Line’s sources suggest that this could perhaps happen before rival Amazon manages to launch its own Amazon Web Services Cloud data center - although reports in February suggested the AWS site is nearly ready to open.

Alibaba is already somewhat involved in the Indian market. It invested in One97 Communications, the owner of e-commerce site Paytm, in February of last year, and bought into India’s largest online marketplace Snapdeal back in August 2015. While Alibaba has bigger hopes for online shopping in India, e-commerce regulation is believed to be making the company nervous.

Alibaba's founder and executive chairman, Jack Ma.

Alibaba’s founder and executive chairman, Jack Ma.

Aliyun rising

In an earnings call earlier this month, Alibaba announced that its cloud subsidiary Aliyun had grown by 175 percent year-on-year in the March quarter and has over 500,000 paying customers. Executive Vice Chairman Chung Tsai called the division “one of the largest cloud computing businesses in the world”, while Wei Wu, Alibaba’s Chief Financial Officer, said that Aliyun “is getting very close to the break-even point.

Alibaba has opened data centers around the world, including in China, Silicon Valley and UAE, but still lags far behind market leader Amazon Web Services. However, having its own data center in India would make its e-commerce bid more cost efficient. Sanchit Vir Gogia, Chief Analyst & CEO of Greyhound Research, told Business Line: “When they start on-boarding millions of sellers and suppliers on the platform, it is clear they will need a means to support that kind of data. It is less expensive compared to relying on a third-party data centre and also there are no issues of data theft.”

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