SoftBank Corp. highlights India as the company's new priority in its expansion, seeking to take advantage of the country's Internet user base which is the third biggest in the world. Moreover, the Japanese company's $627 million stake in Snapdeal, an online retailing company in India, aims to tap the potentially huge E-commerce growth in the region. CLSA Asia Pacific Markets predicts that India will enjoy a sevenfold growth of up to $22 billion in E-commerce industry by the year 2018.
With this announcement, SoftBank becomes one of the biggest backers of online commerce in India. The country has one of the youngest online populations with consumers gaining more access to the Internet. Compared to China, broadband connections and smartphone adoption grows faster in India which is driven by the popularity of and easy accessibility to cheap devices.
SoftBank is also investing in ANI Technologies Pvt, a company that runs Ola Cabs which is a popular taxi booking service that competes with Uber. The financial side of the deal is said to have reached $210 million.
"India has the third-largest Internet user base in the world, but a relatively small online market currently. This situation means India has, with better, faster and cheaper Internet access, a big growth potential," said Nikesh Arora, SoftBank's newly appointed Vice chairman and SIMI chief executive.
Arora, also a former Google executive, shall join both Snapdeal and ANI's boards as part of the investment entered by Softbank.
SoftBank is one of Japan's biggest telecom and Internet groups with a market cap of $92 billion. It has various types of operation such as media and marketing, finance, E-commerce, fixed line telecom and broadband.
Snapdeal.com, which is owned and operated by Jasper Infotech, has over 25 million registered users and over 50,000 business sellers. SoftBank declined to elaborate on how big the stake it is getting in India's third biggest marketplace.
SoftBank plans to invest over $10 billion in India in the next couple of years. Softbank's Chairman and Chief Executive Officer Masayoshi Son had previously met Indian Prime Minister Narendra Modi and telecom minister Ravi Shankar Prasad in separate meetings to discuss plans on growth in India's IT and communications sector in the not so distant future.
"We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade," said Son.
Son is named by Bloomberg Billionaires Index as the richest man in Japan with a net worth estimated at $16.6 billion.
