Alibaba Group Holding Ltd (BABA) Should Forget Silicon Valley And Expand In India Instead

Snapdeal, which is India’s version of Alibaba Group Holding Ltd (NYSE:BABA), is open to a partnership with Alibaba Group Holding Ltd (NYSE:BABA) given the generous valuation that the Chinese e-commerce business has received just before its IPO today. CEO of Snapdeal, Kunal Bahl, talked on CNBC about how well his company is placed in India’s e-commerce scene. 1

While explaining the commitment of his team, Bahl hinted that the company might be willing to reap some benefits of Alibaba Group Holding Ltd (NYSE:BABA)’s high valuation too. It depends a lot on the deal that the e-commerce company is able to strike.

“[…] My goal is and our team’s goal is that we continue building and maybe ten years ahead we may be do an IPO and along the way if there is a partnership opportunity that makes sense for the board of directors to take a call on, we would take that call […],” said Bahl.

Bahl also highlighted Snapdeal’s enormous growth prospects that even surpass Alibaba Group Holding Ltd (NYSE:BABA). He explained that with a total revenue of about $3 to $4 billion India’s online retail is currently at a nascent stage, but within the next 5 to 7 years these revenues are expected to accelerate to $60 to $70 billion. With Snapdeal’s current market share at least 50%, Alibaba Group Holding Ltd (NYSE:BABA) could cash in on this imminent growth.

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Alibaba Group Holding Ltd (NYSE:BABA) IPO has boosted Snapdeal’s confidence on atleast two fronts. Bahl said that Alibaba Group Holding Ltd (NYSE:BABA)’s valuation shows the strength of Asian e-commerce businesses and that they can become much larger than their western counterparts. Furthermore, he also added that Alibaba Group Holding Ltd (NYSE:BABA)’s IPO is a validation of Snapdeal’s business model.

While all eyes are on the ticker symbol BABA today, it is not too soon to look at investment opportunities for Alibaba Group Holding Ltd (NYSE:BABA) as all that equity will have to be invested somewhere.