Alibaba may infuse funds in Snapdeal to enter India

One of the world’s largest e-commerce platforms, China's Alibaba, is said to be negotiating a deal with online retailer Snapdeal to enter

India's burgeoning online retail market. The company may invest in the latter as it is looking at sizing up its market in the country.

As of now, Alibaba has been linking Indian merchants with overseas buyers and sellers. If the deal between Alibaba and Snapdeal gets through, it will create a strong competition for players like Flipkart and Amazon, who are currently leading the space. While the Chinese company is quite late in exploring Indian e-commerce market, it has the advantage of size by sales Alibaba is bigger than Amazon and eBay combined and funds worth 25 billion dollars (Rs 1,52,500 crores) raised through IPO this week.

After Flipkart and Amazon announced aggressive plans with increased funding, the third marketplace model in line, Snapdeal has announced various measures aiming to cross sales of over Rs 6,000 crores from fashion in the fiscal 2016. To achieve its target, the company is bringing skilled designers on board while launching occasion-based fashion stores as well virtual trial rooms. The company is expecting sales of Rs 1,500 crores this fiscal from fashion.

Snapdeal has managed to raise over 233 million dollars (over Rs 1,400 crores) this year from investors including Premji Invest, Temasek and eBay Inc. With its ‘bachate raho (keep saving)’ tagline and focus on unbranded products sold by small manufacturers and retailers, Snapdeal has established itself as a mass-retailer, with over half of these 50,000 merchants selling fashion and lifestyle products that account for 60 percent of its orders.

The plan now is to focus on the branded and premium fashion segment. Electronics accounts for 30 percent of the online retail market while fashion and lifestyle accounts for 25 percent, according to a study by Technopak. But the latter is expected to grow to reach 30 percent of the market in 2019.