China’s Alibaba Group is reportedly trying to buy stake in domestic e-commerce major Flipkart as part of its plan to increase its presence in Indian market.
According to the reports, the firms are in talks and the deal will be only finalized on “Flipkart’s willingness” to offer a stake for a discount on its current valuation of $15 billion.
Alibada has earlier backed other e-commerce such as Paytm and Snapdeal. If the firm strikes a deal with Flipkart, it would emerge as one of the top investors in the Indian e-commerce space, alongside Tiger Global Management and Japan’s SoftBank Group. The Chinese firm is also in discussions to raise its stake in Snapdeal. However, it “wants” a discount on the firm’s current valuation of $6.5 billion to strike the deal.
As fund raising has become difficult for the domestic e-commerce majors at their current valuations, both Flipkart and Snapdeal had to approach Alibaba Group for cash, sources told the daily.
Flipkart losses escalated to Rs.2,000 crore in the fiscal year ending March 2015, up nearly 180% compared to Rs 715 crore in the previous year, according to the company’s filing to Registrar of Companies.
