Alibaba May Move Into India’s Smartphone Market

Alibaba is looking at taking a “significant stake” in India smartphone maker Micromax, according to several financial news outlets.

If a deal materializes, the Chinese eCommerce company would gain entry into the Indian smartphone market, which has been marked by rapid growth. Micromax, with a focus on high-spec budget devices, has an 18 percent smartphone market share in India, CNBC reported Thursday (May 7).

Micromax chairman Sanjay Kapoor told CNBC earlier this year that the company produces 25-3o types of phones in a year, which are geared toward different segments. Should Alibaba pull the trigger and grab a slice of Micromax, the deal could be significant – as much as $1.2 billion, Reuters reported Friday (May 8), citing unnamed sources.

That would value Micromax at up to $6 billion, and allow Alibaba to grab a niche in the growing number of Internet users in the region. Micromax, for its part, would thus be able to raise capital to expand into new businesses. Alibaba would be able to install its YunOS operating system on Micromax devices – thus making inroad into the Indian eCommerce market, which has been the province of domestic players such as Snapdeal, Reuters reported.

Recently, in Alibaba’s home base, China Telecom – the nation’s largest telecom operator – has officially teamed up with the eCommerce company to roll out low cost ($48) smartphones to citizens in rural China. The deal with China Telecom – and access to its 186 million subscribers – is part of a two pronged attack for Alibaba. The eCommerce giant has increasingly come to view smaller cities as a key to the growth of both its retail business and its operating system, YunOS.

YunOs will come preloaded on the Uniscope, Ctyon, and Kingsun smartphone models. Six pricier models from less obscure makers like Coolpad, Hisense, and TCL will not have YunOS, but will have Alibaba’s shopping app Mobile Taobao pre-installed.

Alibaba had developed YunOS to serve as a competitor to Android in China, which currently holds a 80.4 percent market share in Chinese cities.