The news of the significant potential investment comes via the Wall Street Journal, which cites people familiar with the matter. One of the sources adds that the two companies are planning to invest together in Snapdeal for a combined 10 percent stake. The deal talks were also said to be in advanced stages, but still require regulatory approval to proceed.
Snapdeal has thus far received major investment from the likes of eBay and SoftBank to the tune of $1 billion, with the company valued at roughly $2 billion last year. WSJ's sources go on to add that Alibaba gave up an earlier deal as it wasn't looking for a small stake in Snapdeal. Foxconn Chairman Terry Gou is said to have persuaded Alibaba Executive Chairman Jack Ma to make a joint investment.
The WSJ report speculates that an investment for Foxconn in Snapdeal could see the Taiwanese firm gain a foothold in the booming Indian market. The report points out that with a stake in Snapdeal, Foxconn could give its clients a sales channel in the country. Foxconn is also said to be looking to develop a logistics operation apart from a funding platform for Indian startups in an attempt to diversify its portfolio.
Foxconn recently announced it was looking to build 10-12 plants in India by 2020, which may include an iPhone manufacturing facility as well. The company separately announced with fellow Taiwanese firm Innolux it was looking at investment opportunities in the country.Alibaba on the other hand recently made clear its intentions of investing more abroad, with globalisation a top priority for the firm. The company was recently reported to be eyeing a stake in Micromax, a leading mobile and tablet manufacturer in the country. A stake in Snapdeal could help Alibaba gain a foothold in India's burgeoning e-commerce industry. The Chinese online giant is however yet to make a major investment in India beyond its estimated $500 million investment for a 25 percent stake in Paytm, an online payment solutions provider and marketplace.