Alibaba: The journey of food-tech giant, Zomato is going through a major crisis because of the logout campaign of its partner restaurants. The movement results from the firm’s discounting practices, mainly because of the loyalty program Zomato Gold. It has led to expanding of expenses and losses, resulting in poor unit economics for these restaurants.
The restaurant owners stand firm on their division even though the startup is making amends and finding a middle ground. It is causing Zomato along with other food-tech platforms to cost big. The corresponding balance is likely to reflect a hefty dent due to the massive discounts Zomato has offered during 2019.
It has made the investments in Zomato to look like a menacing failure for Alibaba (1), even though the food-tech market was once an extremely promising avenue for investment.
Alibaba to Change Attitude Towards Indian Market
Paytm Mall is also in the process of revising its business model and operations. The ecommerce firm is trying to find stable ground after failing to mark its presence in the e-commerce industry. Notably, it is not the first disappointment of Alibaba in its ecommerce portfolio. Snapdeal is topping the list with significant turnaround activities for a restart.
Similarly, Paytm Mall is also looking for all kinds of modifications to reorganize its platform. It got separated from One97, made significant changes in its top management as Amit Sinha and other senior executives left the firm.
BigBasket is another unicorn portfolio of Alibaba that still has scope to keep Alibaba’s investment in India. However, it depends on how it performs in the current market. Alibaba has now opted to observe rather than to act. The company is also not seeing any investment opportunities in India. The company has decided to wait than to take any risks. Rahul Bahl, who led the four members India Investment Alibaba team, is currently only focusing on handling its existing portfolio.