Alibaba group is reportedly in talks to buy a stake in Indian smartphone maker Micromax. The Chinese e-commerce giant is looking to gain entry to India, and its rapidly growing consumer market. Alibaba could be investing as much as US$1.2 billion (RM4.3 billion) into the company for a 20-percent share of Micromax.
Micromax was previously locked in talks with Japanese firm SoftBank, but negotiations stalled after differences in valuation of the company. Micromax is the second largest smartphone manufacturer in India, at least it is by purely volume of sales. That is impressive considering that India is world’s third largest smartphone market. It is not surprising that Alibaba wants a piece of that pie.
Alibaba provides one of the largest e-commerce sites in China, although it is facing substantial competition from local rivals. Expanding to India would allow the company to tap the growing market there, without having to deal with any competitor large enough to challenge it. The deal would allow Alibaba to roll out its own services, like Alipay, to Micromax devices in India. On the other side, an investment would allow Micromax to continue its expansion into new segments; which would also indirectly benefit Alibaba.
Neither Alibaba or Micromax has commented on the talks, but they will surely have something to say about it eventually.
[Source: Android Authority]