Alibaba Eyeing Indian Online Marketplace ShopClues, Possible Merger With Paytm

The massive Chinese online marketplace Alibaba has had talks to acquire the online marketplace ShopClues and merge it with the Paytm online marketplace as a way to shore up its presence in the Indian marketplace, according to a report from The Economic Times.

ShopClues is valued at more than $1 billion and is a much bigger online marketplace than Paytm, of which Alibaba has a financial stake of about 40 percent.

ShopClues, which bills itself as an online flea market selling cheaper merchandise to shoppers searching for a bargain, has a number of investors, including GIC of Singapore, Tiger Global, Nexus Venture Partners and Helion, and has raised about $250 million in funding to date, according to ET. ShopClues is said to be reporting a revenue run-rate of $750 million based on the merchandise it sells on its marketplace.

Alibaba is interested in merging ShopClues with Paytm as it eyes gaining a foothold in the Indian market and an eventual showdown with eCommerce giant Amazon over the lucrative marketplace that boasts the second-largest population in the world at almost 1.3 billion people.

But it may already be an uphill climb for Alibaba in India, as Amazon has already become India’s second-largest online marketplace and is beginning to threaten market leader Flipkart.

“As a company policy, we do not, in principle, comment on rumors about our business plans in the media,” an Alibaba spokesman said in an email statement to ET. “India is an important emerging market with great potential, and we are absolutely committed to developing this market for the long term. We see the market as a natural progression of our strategy to expand Alibaba’s global footprint and believe that it offers tremendous opportunities for the expansion of our ecosystem for doing commerce globally.”

ET reported that Alibaba is exploring other acquisition options in India as well, including possibly acquiring a large stake in Flipkart.