Snapdeal to raise USD 500 million from Alibaba, SoftBank, Foxconn
05.08.2015 296 views
Snapdeal, an Indian online retailer, is allegedly set to raise USD 500 million from Alibaba Group, SoftBank and Foxconn.
The latest round of support would value Snapdeal at more than USD 5 billion, according to various sources cited by Reuters. Snapdeal secured a USD 627 million investment from SoftBank in October, 2015. The deal reflects strong growth in India's ecommerce sector, driven by affordable smartphones and internet connections. India is the world's third-biggest smartphone market and low-priced smartphones are top sellers.
The Indian firm competes with Flipkart Online Services and the local subsidiary of Amazon.com in the country's online shopping market. While India has fewer internet users than China, online sales could rise to more than USD 100 billion in 2020, from USD 2.9 billion in 2013, making it the fastest-growing market globally, according to a Morgan Stanley research report, cited by the source.
The deal will be Alibaba's first direct investment in India, although affiliate Ant Financial Services Group agreed to buy 25% of Indian payment services firm One97 Communications in February, 2015. Alibaba was in direct funding talks with Snapdeal in March, 2015.
Foxconn founder, Terry Gou, told shareholders at an annual meeting in July, 2015 that India is a key market this year for his group. Foreign money has been pouring into India's fast-growing commerce sector. The industry attracted USD 5 billion in 2014, according to Morgan Stanley, the source cites.
Source: The Paypers