Alibaba and SoftBank are holding joint discussions with bankers in India as they try to secure a slice of India’s consumer e-commerce market, according to India’s Economic Times.
The preliminary meetings are to discuss potential targets for the two companies, according to an unnamed source who was present at the meetings. SoftBank is the largest investor in Alibaba (which currently does only B2B onllne commerce in India) as well as in Snap deal, which is one of the top three online retailers in India and competes against Amazon and Flip kart.
One scenario discussed involves Alibaba participating in follow-on rounds of funding for companies in Soft Bank’s Indian portfolio, which includes Snap deal, taxi services firm Ola cabs and online real estate venture Housing. Alibaba could also acquire a majority stake in ventures identified by SoftBank, which expects to invest up to $10 billion in India.
The talks come at a time when India’s consumer Internet market is estimated to grow to $43 billion by 2019, with online retail contributing about $23 billion, according to Nomura Securities. Investment banker Nitin Agarwal of Equirus Capital said India is “an open battlefield between Amazon and Alibaba, and both are going full steam ahead to capture this market.”
But regulatory ambiguity continues to surround Indian e-commerce, specially relating to tax burdens and foreign direct investments. “SoftBank is taking a very focused approach towards Internet businesses across Southeast Asia, and India is the largest and the most critical market in the region,” Agarwal said.