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Ratan Tata to invest in e-commerce site Snapdeal, says report

The former Tata Sons chairman will likely make a personal investment in the four-year-old e-commerce site

BS Reporter  |  Mumbai 

In the latest sign of growing investor interest in India’s growing e-tailing sector, Ratan Tata is reported to be considering an investment in e-commerce site Snapdeal.

Tata, chairman emeritus and former chairman of Tata Sons, is said to be exploring the investment in a personal capacity, the Economic Times reported Wednesday.

Tata, who helmed a radical consolidation of Tata Sons’ many businesses and turning the group into a global auto and steel powerhouse with the acquisition of Jaguar Land Rover and Corus Steel, besides taking Tata Consultancy Services to India’s most valued firm, is expected to be a minority investor in Snapdeal, the report said.

Snapdeal founder Kunal Bahl has also been reported as saying that he is being aggressively pursued by investors who want a piece of his company.

The e-commerce segment is India has been growing at a rapid clip, with global investors lining up for a slice of the pie. With total e-tailing sales only at $13 billion, investors are betting on continued growth as internet penetration and mobile data usage picks up., India’s largest e-tailer, recently raised $1 bn, with investments from Tiger Global, Accel and Naspers, all of whom have board representation. Shortly after Flipkart’s announcement, Amazon India said it would invest $2 bn in its India operations.

Earlier this year, Flipkart said it had hit $1 bn in sales, as calculated by gross merchandise value transactions. Following its latest fundraising announcement, co-founder Sachin Bansal said the company’s next target would be a $100 bn valuation. It’s current valuation is about $7 bn.

The growth of the e-commerce segment has been driven in part by manufacturers’ willingness to sell products at a discount online, with some going so far as to adopt an online-only strategy. Motorola, for example, recently launched its Moto-G range of smartphones exclusively through Flipkart, as did Chinese smartphone Xiaomi. Philips Lighting, on the other hand, sells its 'Imaginative Lighting Range' for kids exclusively through Amazon.

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First Published: Wed, August 06 2014. 12:36 IST