According to a recent report from Re/code, Chinese e-commerce giant Alibaba is in talks to purchase around a 20 percent stake in Micromax, India’s second-largest smartphone manufacturer. Citing unnamed sources, the report states that upon completion, the deal would allow Alibaba to invest as much as $1.2 billion in the smartphone maker.

Micromax and Alibaba have been in talks for some time, but the discussions, let by Japanese telecoms firm SoftBank, were ultimately stalled “over differences in valuations”. Re/code’s sources claim that Alibaba wants to invest in Micromax to have more access to Internet users in India. Alibaba could perhaps use this investment to roll out its own services to Micromax devices, such as Alipay, the company’s online payment platform. Additionally, the stake sale could help Micromax raise money as it expands into new business segments around the globe.

It’s no wonder why Alibaba is interested in Micromax – the smartphone maker currently holds about 18 percent marketshare in India and is growing rapidly every month. And with Alibaba’s combination of its own mobile operating system and significant e-commerce marketplace, there’s no doubt that Alibaba will be able to gain a significant foothold in India if this deal goes through.

We’ll be sure to give you more details on the situation as they arise.

Read comments