China’s Alibaba Group is looking to increase its footprint in India and is possibly exploring buying a stake in India’s largest Internet firm Flipkart Ltd.
The sources say that the talks are at an initial stage and the deal is dependent on whether or not Flipkart is willing to offer a discount on its current valuation of $ 15 billion. There is also speculation of Alibaba talking to Snapdeal but it wants a discount on the firm’s current valuation of $ 6.5 billion, says livemint.com.
The Indian e-commerce is currently in a phase where sales have shot up but losses are mounting too. The burden of luring buyers by offering deep discounts has put the combined losses of Amazon India, Flipkart and Snapdeal at Rs. 5,052 crore . Down the line, consolidation or investments like these from outside of India seem to be the only feasible option to keep operations running.
Alibaba is no stranger to the Indian m-commerce and e-commerce space. One97 Communications, the parent company of Indian mobile payment and commerce platform Paytm, had said in September last year that it had received funding from Alibaba Group Holding and its Ant Financial Services Group. “The latest round of funding will allow Paytm to achieve scale and develop its vibrant mobile commerce and payment ecosystem in India and invest in marketing, technology and talent,” One97 Communications had said in a statement at that time.
Alibaba, along with SoftBank Group and Foxconn, also led a round of investment pegged at $ 500 million in Snapdeal in August last year. Incidentally, SoftBank is also an early backer of Alibaba.