Alibaba Group Holding Ltd founder and CEO Jack Ma said last month that he would invest more in the rapidly growing Indian e-commerce market. But he doesn’t want to go against SoftBank Corp, which owns about 34% stake in the Chinese Internet giant. The Japanese tech conglomerate has also become one of the largest shareholders in Indian e-commerce company Snapdeal by investing $627 million.

Alibaba Group Holding Ltd To Join Hands With SoftBank In India

SoftBank to invest $10 billion in India

Alibaba is keen to grab a slice of the Indian e-commerce market, which is growing at more than 50% annual rate. So, the company is in talks with SoftBank to joins hands in the Indian market, rather than going against each other. Two sources familiar with the discussions told The Economic Times that the two companies recently held meetings with merchant bankers to discuss potential acquisition and investment opportunities.

Sources said that the discussions were still in early stage. In one scenario, Alibaba can participate in follow-on funding rounds for companies in SoftBank’s portfolio in India. On Oct.28, SoftBank invested $627 million in Snapdeal and $210 million in Uber rival Olacabs. The Japanese company has also picked up a stake in online real-estate venture Housing.com. SoftBank chairman Masayoshi Son has pledged to invest $10 billion in India.

Alibaba testing waters through SoftBank

Alibaba could also pick up a majority stake in firms identified by SoftBank in India. Indian e-commerce market is poised to see fierce competition. Market leader Flipkart has raised $1.9 billion this year so far to step up investments and strengthen its presence, especially in smaller cities and villages. U.S. e-commerce giant Amazon.com, Inc. has also announced to invest $2 billion in India as competition intensifies. Alibaba cannot afford to watch from the sidelines.

One source, who participated in the meeting, told The Economic Times that Alibaba is a very strategic company that won’t just jump in and starting acquiring firms in India. It is currently testing the waters through SoftBank to get a feel of the market. Alibaba has been focused on investments and acquisitions. The company spent more than $4 billion this year to invest in companies ranging from taxi-booking to film production.

Alibaba shares fell 0.16% to $110.47 in pre-market trading Monday.