In what might be called as a major joint venture (JV), China’s Alibaba has reportedly initiated talks with Mukesh Ambani’s Reliance Retail. Alibaba, the Chinese e-commerce giant is all set to invest in Reliance Retail, and acquire some stake to make an entry into the Indian market.
According to Livemint, Alibaba co-founder Jack Ma is said to be in talks to acquire a large stake in Ambani-led Reliance Retail with an investment of USD 5 billion to take on India’s largest e-retail giant Flipkart and Jeff Bezos-owned Amazon. The leading portal has quoted officials saying, “Alibaba is willing to pick up a significant stake in Reliance Retail, preferably 50%, which will require Alibaba to invest $5-6 billion. It could also result in a strategic JV between Alibaba and Reliance Retail, with a smaller stake held by Alibaba.”
The joining together of two big companies is likely to rattle existing e-commerce market leaders in the country. The move could spell a bumpy ride for the likes of Flipkart and Amazon in a market where they have pumped in billions of dollars. According to the report, Alibaba Group’s executive chairman, Jack Ma, met RIL chairman Mukesh Ambani in July-end in Mumbai to discuss the proposal. The two reportedly discussed a number of issues, including a plan to create a large omnichannel retail entity through the proposed joint venture.