How Softbank is adding spice to the Amazon-Alibaba battle in Indian e-commerce

Venture Beat recently published a piece headlined 'India’s e-commerce battle is not Indian anymore' that highlighted the battle between Amazon and China's Alibaba Group in the world's fastest-growing e-commerce market.

But there's probably a third player in the game too. And that is Japanese telecom and investment giant Softbank which is suddenly the buzzword in India's e-commerce world.

After trying to broker a merger between India's homegrown online marketplaces, Flipkart and Snapdeal (where Softbank holds a 30 percent share), it is now looking to invest in the country's biggest mobile wallet firm, Paytm.

Reports suggest that Softbank might put in about $1.5 billion for a 20 percent stake in Paytm thereby valuing the unicorn at over $8 billion.

Softbank's interest in Paytm is noteworthy because the mobile wallet is 40 percent owned by Alibaba, which itself is backed by Softbank.

Also, this comes at a time when there's already talk of Alibaba hiking its stake in Paytm to about 62 percent. If Softbank invests in Paytm, it will end up diluting Alibaba's stake.

Interesting isn't it?

There's also a likelihood that Softbank will merge Snapdeal-owned mobile wallet, Freecharge, with Paytm as both companies are inherently similar.

Snapdeal anyway is struggling to survive in the face of Amazon's aggressive expansion. The Seattle-based firm is now India's second-biggest online retailer trailing only Flipkart. And it is narrowing that gap too.

Snapdeal, which counts Alibaba as well among its investors, had also considered merging with Paytm. Like if there is a business version of a shark fight, India's e-commerce space serves as a perfect landscape for it.

Everyone is deeply connected everywhere. Everyone wants a pie of everything. We're in for a major consolidation with possibly one or two formidable players for the future.

Or as Venture Beat says, we are in for a "quasi proxy war" between "the Americans and the Chinese". Make that between the Americans and the Chinese-Japanese.

Mashable has reached out to Softbank for comment.