Alibaba Cools on Idea of Investing in India's Snapdeal

India is one of the hottest e-commerce markets on the planet, but Chinese giant Alibaba has for now scrapped plans to invest in one of the two big online shopping startups in that country, according to a person familiar with the company’s thinking.

Alibaba has held discussions with the company, Snapdeal, about a possible investment, this person said. But the talks did not involve a deal anywhere close in size to the $1 billion number reported by India’s Economic Times, and Alibaba is leaning away from making any investment whatsoever in Snapdeal right now, according to the source.

Representatives for both companies declined to comment.

The talks come at a time in which the rise of smartphone adoption in India, the world’s second most-populous nation after China, has led to a burst of online commerce in the country. Snapdeal and fellow Indian shopping startup Flipkart have each raised more than $1 billion for their online marketplaces as they look to fend off Amazon, which launched its own online store there in 2013. Amazon has said it plans to invest $2 billion into the business.

Snapdeal, led by CEO Kunal Bahl, received a large investment from eBay one year ago, and later raised an investment of more than $600 million from Japanese giant SoftBank, which happens to be Alibaba’s largest shareholder. While eBay and Amazon are both placing big bets on India, the e-commerce industry there is still six to seven years behind China, Bahl said previously, giving Alibaba some time to consider alternate ways to enter the market other than a Snapdeal investment.

This article originally appeared on Recode.net.

Will you support Vox’s explanatory journalism?

We'll be honest: advertising alone isn't enough for Vox, or most newsrooms, to do the amount of high-quality journalism that the world needs and keep it free. We count on contributor support in order to produce nuanced, clear, and optimistic journalism. We don't have a paywall or ask our readers to subscribe in order to see our content, so instead, we’re coming to you this #GivingTuesday to ask you to make an investment in our future. If you’ve read an explainer this year that helped you to see an issue more clearly, got the answer to a long-time question, or just plain learned something, then we hope you’ll consider making a contribution of $20 or whatever you can today.

One-Time Monthly Annual

$5/month

$10/month

$25/month

$50/month

Other

$

Yes, I'll give $5/month

Yes, I'll give $5/month

We accept credit card, Apple Pay, and Google Pay. You can also contribute via