The China-based ecommerce giants, Alibaba, has begun talks with Reliance Retail to launch a major Indian retail joint venture which is thought to be worth at least $5bn, live mint reports.
The proposal is being put forward in order to challenge rivals such as Flipkart and Amazon in the world’s fastest-growing economy.
It is believed that Alibaba is interested to purchase a large stake in Reliance Retail in order to expand their physical retail businesses in India.
According to live mint’s two sources, one said: “Alibaba is willing to pick up a significant stake in Reliance Retail, preferably 50%, which will require Alibaba to invest $5-6 billion,” one of the two people said. “It could also result in a strategic JV between Alibaba and Reliance Retail, with a smaller stake held by Alibaba.”
The second source said: “The deal is crucial for Alibaba, especially after RBI (Reserve Bank of India) directed Paytm (in which Alibaba holds 49%) to stop on-boarding new customers because of the shareholding pattern of Paytm.”
It was also revealed that Alibaba’s executive chairman, Jack Ma, met Reliance Industries chairman, Mukesh Ambani, in India to discuss the potential deal.
If successful, it will become Alibaba’s largest investment in an Indian company.