Alibaba puts another $200 million into India
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Alibaba puts another $200 million into India

Alibaba, China’s reigning king of Ecommerce and one of the country’s “Big Three” internet companies (alongside Baidu and Tencent), has announced that it’s plunging another $200 million into the Indian Ecommerce market. The investment will be made into India’s leading online supermarket, Bigbasket, giving Alibaba a 25% share in the smaller company, according to people familiar with the matter, who would rather not be named. It marks the latest move in an ongoing chess game between Alibaba and western rival Amazon to see who can conquer what is being touted as the world’s next big Ecommerce market.

Alibaba’s share price has appreciated by 105% so far this year

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SOURCE: Yahoo Finance

Bigbasket was a former target for investment from Amazon, but the latter company ended up looking for online grocery expertise elsewhere, buying U.S. grocer Whole Foods Markets Inc. in June for $14 billion. Amazon’s Indian ambitions have not faded, though. The country is home to the world’s fastest growing Ecommerce market, and Amazon founder and CEO Jeff Bezos has pledged $5 billion to capture it. Alibaba shares that sentiment, having previously invested in One97Communications Ltd. – a digital payment and Ecommerce business.

The Bigbasket deal is still awaiting approval from India’s antitrust regulators (the Competition Commission of India), but sources close to the matter claim Alibaba now views this approval as a “formality” and expects it to come through “any day”. When it does, Alibaba will have gained access to a powerful strategic asset in the war to conquer Indian Ecommerce. From its base in Bangalore, Bigbasket delivers in two-dozen Indian cities, offering 18,000 products from 1,000 brands.

Disclosure

Dominion holds Alibaba and Amazon in its Global Trends Ecommerce Fund.


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