 "Alibaba is globetrotting and Snapdeal could be its in into India's e-tail")
Chinese e-commerce giant Alibaba is reportedly in talks with online retailer Snapdeal to enter India.
According to reports, Alibaba, whose shares are set to debut on the US market thisFriday in what could be the world’s largest ever initial public offering, has discussed with Snapdeal a possible investment in the Indian company.
According to an ET source, Snapdeal mayraise up to $300 million in a potential round of fund-raising. Alibaba is likely to lead that.
Snapdeal, in which Ratan Tata, the former chairman of salt-to-steel Tata conglomerate, holds a stake, is also attracting attention from Japan’s largest e-commerce company Rakuten Inc and telecommunications firm SoftBank Corp, the ET report said, citing investment banking sources.
Alibaba increased the price range on its initial public offering to $66 to $68 on Monday, reflecting strong demand from investors for the year’s most anticipated debut.
The company, which entered the Indian market with a B2B model in 2010, currently does negligible business in the country. And, with fresh funding it is looking to re-enter the market through Snapdeal. But, India may bevery tiny part in Alibaba’s map of larger acquisitions.
Alibaba on shopping spree
The e-commerce giant has been on a shopping spree this year. Alibaba has invested in or bought outright multiple companies both in China and abroad.
Quoting CB Insights research, CNBC reported that Alibaba has spent over $4 billion on just four acquisitions in the first half of 2014 compared with an average of one investment per year from 2008 to 2012. Since 2013, Alibaba has made some 23 investments, the biggest deal being mobile web developer UCWeb for $1.9 billion in June this year.
Another CNBC report noted , that the company has invested $16 billion in an array of start-ups in the US since 2011.
Alibaba also recently invested $586 million for an 18 percent stake in Weibo, China’s equivalent to Twitter. It bought 20 percent stake in US-based messaging app TangoMe for $215 million in March. According to this TechinAsia report , Alibaba might be using Tango as a platform on which to experiment with mobile commerce abroad.
In May, Alibaba invested $250 million into Singapore’s national postal service this was essentially to widen its logistics chain into Southeast Asia.
Plans to go global:
Earlier this week, Alibaba founder and executive chairman Jack Ma told reporters that the company plans to aggressively expand in the United States and Europe after its initial public offering. “We hope to become a truly global company,” Ma said. The Wall Street Journal quoted him as saying that Ma expects to see growth in Asian markets as well as Brazil and Russia.
India plans:
Given that Alibaba already controls about 80% share of the e-commerce in China, it is but natural for the company to be keen on India, especially if it wants to compete with Amazon in a global level. Amazon recently pledged a $2 billion investment into India to take on leading players such as Flipkart and Snapdeal. And since Alibaba already runs China’s two most popular online shopping sites, Taobao and Tmall, it makes more sense for the company to buy rather than build in India in order to build scale or a s this Business Line story suggests it could be testing the waters here before it goes into a full-fledged expansion drive in Asia’s third largest economy.