Alibaba Group Holding Ltd (NYSE:BABA) is reportedly in talks that might give way to a $500 million investment in PT Tokopedia, Indonesia’s largest online retailer.
Sources familiar with the matter reported that the Chinese online giant is currently in talks to participate in the investment round with a heavy investment of as much as $500 million. Alibaba is poised to lead the investment round with its massive investment. Other companies such as Sequoia Capital and SoftBank Group Corp also plan to participate in the investment round.
A previous report from Bloomberg had reported that Alibaba’s rival,JD.Com Inc (ADR)(NASDAQ:JD) was also interested in the funding round and that it was in talks with Tokopedia. However, it seems that Alibaba managed to squeeze JD.com out of the deal in which it had also planned to invest millions of dollars. One of the sources stated that JD.Com most likely pulled out of the talks.
“We don’t comment on market rumours,” stated an Alibaba spokesperson.
Alibaba’s upcoming funding in Tokopedia is believed to be the largest investment that the company has carried out ever since the $2 billion infusion in Lazada Group SA, the largest e-commerce company in Southeast Asia. The company has been focusing on investments in Southeast Asia to take advantage of the e-commerce potential that the region offers. Tokopedia was founded in 2009 as an e-commerce marketplace for small and medium businesses in Indonesia.
Indonesia has been identified as the fastest developing Asian e-commerce market outside China and India. Analyst believe that the counrty’s e-commerce market will grow from $8 billion in 2016 to $21 billion in 2021. Alibaba and other firms are well aware of the statistics and are lining up so that they will be in a good position to take advantage of the projected growth. The rapidly growing adoption of mobile technology in the region as well as online and mobile payment solutions is expected to facilitate the growth.
Alibaba stock closed the latest trading session on Tuesday at $152.44 after a 0.12 percent gain compared to the value of the stock during the previous close on Monday.