One of India’s leading e-commerce giants, Snapdeal, has reportedly snapped up $500-million worth of investments from China’s Alibaba, Softbank Group and Foxconn.
The development is being hailed as growing faith India’s nascent online trading platforms, which have been increasingly positioning themselves as competitors to global giants like Amazon and eBay.
In India, Snapdeal competes with Flipkart Online Services and the local subsidiary of Amazon.com Inc. in the country’s online shopping arena, which Morgan Stanley estimates will be worth $102 billion by 2020.
The latest deal marks Alibaba’s first direct investment in India after its affiliate, Ant Financial Services Group, had agreed to buy 25 per cent of Indian payment services provider One97 Communications in February.
The deal is expected to forge an alliance between Snapdeal and Alibaba, raising the prospect of partnering on technology and products.
International companies have been increasingly getting attracted to the potential offered by India’s online market. The US has a head-start with the likes of Facebook and Twitter already entrenched with the country’s smartphone boom.
Alibaba-founder Jack Ma has made his intentions quite clear, with an earlier $500-million investment in India’s mobile payment platform PayTM. Chinese smartphone maker Xiaomi also marked its launch in the country in 2014.
They hope to cash in on India’s low-end and cost-conscious internet market, where China has an edge over its American competitors.Tagged: Technology, Investment, Digital India, eCommerce