Flipkart's Sachin Bansal takes jibe at Alibaba's India entry

Snapdeal CEO Kunal Bahl reminds Bansal of Flipkart's valuation dip

Flipkart co-founder and chairman Sachin Bansal on Friday took a dig at Chinese e-commerce firm Alibaba for its decision to enter India's crowded e-commerce market directly, suggesting its existing investments in smaller rivals Paytm and Snapdeal might have come a cropper.

"Alibaba deciding to start operations directly shows how badly their Indian investments have done so far," Bansal tweeted on Friday. He did not, however, name the investments by Alibaba.

In no time, Kunal Bahl, co-founder and chief executive officer of Snapdeal, tweeted back: "Didn't Morgan Stanley just flush ($)5 bn worth market cap in Flipkart down the (drain)? Focus on (yo)ur business, not commentary."

Bansal's comment also comes at a time when Flipkart is facing increased competition from Amazon, whose founder Jeff Bezos has an open cheque to conquer the Indian e-commerce market.

Notably, Alibaba was also trying to invest in Flipkart, in a bid to have a pie in the three large e-commerce players in India to take on Amazon.

Amazon, which dominates the US, has lost the Chinese market to Alibaba and the two players do not want a repeat of that in India - the largest open market for global e-commerce firms.

While Flipkart's valuation came down after Morgan Stanley marked down its investment value, Snapdeal, which raised $200 million from the Ontario Teachers' Pension Plan and others in the same month, saw its valuation increase to $6.5 billion.

Meanwhile, Flipkart has seen a leadership change with co-founder Binny Bansal - who is pushing a shift in strategy to focus on operational efficiency, building infrastructure and profitability - taking charge.

Alibaba, which plans to invest about $2 billion in India, has investments in Snapdeal and Paytm, and was in talks to fund Flipkart but did not proceed owing to valuation issues. Early this month, The Economic Times had reported that Amazon had held talks with Flipkart to acquire the firm but did not proceed owing to the steep valuation commanded by the Indian firm.

A Morgan Stanley research report in March pegged the total gross merchandise value (GMV), or the value of traded goods, among Flipkart, Amazon and Snapdeal at $13.5 billion, with Flipkart having the lion's share at 45 per cent. Snapdeal followed with 26 per cent and Amazon, a late entrant, had 12 per cent of the GMV. The report also warned of increased competition with the two smaller rivals attempting to close the gap with Flipkart.