The amount that Alibaba is proposing to invest has not been made clear. Snapdeal is currently raising funds and discussing with a number of different investors but no names have been released of possible investors except for Alibaba.
Snapdeal in 2014 received nearly $1 billion in investment from Softbank, eBay and others. The company is owned by Jasper Infotech.
The talks arrive as the e-commerce market in India is growing rapidly as more of the population is going online to make purchases of accessories, clothes, electronics and books. Morgan Stanley has predicted that the e-commerce market would grow to over $100 billion before 2020 from its 2013 total of $3 billion.
Global investors have poured billions into companies conducting e-commerce in India to grab part of the pie in this rapidly expanding market. In 2014, India’s largest marketplace online Flipart Internet raised over $2 billion, while e-commerce behemoth Amazon.com based in the U.S. said it would invest over $2 billion in an India expansion.
For Alibaba, investing in Snapdeal would allow the company to expand its India footprint after its affiliate in financial services Ant Financial, took a stake of 26% in the payment business that is based in India known as One97 Communications.
It was reported this week by an international daily that last December Ant Financial as well as Alibaba were investing close to $575 million for a 30% combined stake in One97, which operates Paytm, an online payment unit.
Softbank, which owns Sprint Corp the telecom carrier based in the U.S., is the biggest shareholder of Alibaba with a stake of over 30%.
E-commerce is growing at rapid rates across the globe, with many companies in the U.S. now realizing that they need a larger profile online due a change in the way consumer now shop.