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Alibaba (BABA) Eyes India's Snapdeal.com with $1B Investment - Stocks in the News

Zacks Research Staff

Alibaba Group Holding Ltd (BABA), China’s e-commerce giant, is in talks for a potential $1 billion investment in Indian online marketplace Snapdeal.com.

India’s e-commerce market has been expanding rapidly over the past few years, with consumers turning more and more to the Internet to shop for their needs. Alibaba is not the first company to take notice. Last October, Snapdeal secured a $627 million investment from Japan’s Softbank, who was also an early backer of Alibaba.

Morgan Stanley analysts predict the Indian e-commerce to grow from $11 billion in 2013 to $137 billion in 2020.

Last year, Flipkart.com, India’s biggest online marketplace by sales, raised about $2 billion, while U.S. e-commerce giant Amazon.com Inc (AMZN) said it would invest $2 billion to increase their presence in India last year.

According to The Wall Street Journal, “an investment in Snapdeal will allow [Alibaba], which raised $25 billion in an initial public offering in the U.S. last year, to expand its foothold in India after its financial services affiliate Ant Financial took a 26% stake in the online payment business of India-based One97 Communications Ltd.”

Shares of Alibaba have fallen almost 2% since market opening Wednesday, resting at $81.41. The company sits at a Zacks Rank #3 (Hold).

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