Dive Brief:
- Alibaba has contributed to a $500 million financing round for Snapdeal, an e-commerce startup based in India, alongside Foxconn and SoftBank.
- The online marketplace sells a variety of products, similar to its biggest competitors in the country, Flipkart and Amazon, as well as other services.
- Alibaba founder Jack Ma expressed an interest in the Indian e-commerce market—thought to be one of the world’s hottest—during a visit there earlier this year.
Dive Insight:
Chinese e-commerce giant Alibaba has gained a foothold in India with an investment in Snapdeal, setting the stage to engage rivals Amazon and Flipkart in a battle for dominance in the world’s hottest e-commerce market. The capital infusion brings Snapdeal’s total valuation to $5 billion, behind Amazon and the $15 billion Flipkart, but improves its position in the marketplace.
India’s e-commerce marketplace is was worth an estimated $3.2 billion last year, but annual growth is expected to exceed 50% every year to reach $16 billion in 2018. Numbers of online and mobile shoppers are expected to triple during the same period to reach 128 million—still less than a fifth of the country’s 700 million people. With a median age of 27 and low data rates, India is adding mobile users fast.
Snapdeal will likely continue to develop its network of sites, which target retail sellers as well as banking, telecom, and other services. The strategy is similar to Alibaba’s family of sites in its native China, and in line with Snapdeal CEO Kunan Bahl’s interest in going beyond retail to bring transactions in all sectors online.
