Alibaba and Foxconn are discussing investing around $500 million jointly in Snapdeal, an Indian e-commerce startup, The Wall Street Journal (WSJ) reported, a move they believe makes more sense than doing so separately.

The investment would value the company, an online marketplace in India that claims more than three-quarters of its sales come via mobile devices, at around $5 billion.

The report also quotes one source as saying that the Chinese e-commerce giant and the Taiwanese contract manufacturing company have already taken a joint 10 per cent stake in Snapdeal and that the deal is awaiting regulatory approval in India.

Earlier this year, talks between Alibaba and Snapdeal stalled because the former wasn’t interested in a small scale investment, the report adds.

Snapdeal recieved $1 billion last year from Japan’s SoftBank and eBay as well as other existing investors, to prepare it to compete with international and local rivals Amazon and Flipkart.

In May, it acquired local firm MartMobi which creates mobile sites and apps for e-commerce stores.

Alibaba has invested in India before. It was looking to acquire a 20 per cent stake in India’s largest smartphone maker Micromax last month, a deal estimated to be valued at $1.2 billion, while its financial-services affiliate, Ant Financial, took a 25 per cent stake in the online-payment business of India-based One97 Communication.

As for Foxconn, known for assembling iPhones, it has been looking to establish itself in India where there has been a huge demand for smartphones while wages in China rise and competition for Apple’s orders increases.

In March it said its FIH Mobile unit will start manufacturing handsets in Micromax and the WSJ report says it wants to set up a logistics operation and a funding platform for startups in the country as it aims to diversify beyond hardware assembly.

India is the world’s third-largest smartphone market by shipments after China and the US, with a 25 per cent smartphone penetration rate.