One of India's leading online retail platforms, Snapdeal, has raised $500 million from China's Alibaba Group, existing investor SoftBank and Taiwan's iPhone manufacturer Foxconn, according to reports. The move comes after Snapdeal raised at least $860 million last year in four separate rounds of funding.

The investment will give Snapdeal extra financial muscle in its battle against homegrown online retailer Flipkart and the Indian unit of Amazon, both of which received large investments of their own recently; Flipkart, currently India's largest online store, was rumored to have raised $700 million in funding from investors including Tiger Global last week, while Amazon's Indian operations received $2 billion from its parent company last year, with billions more reported to be on the way.

The Snapdeal investment will represent Alibaba's first direct foray into e-commerce investment in India. Some months ago, the Chinese retail giant was in talks with Snapdeal to purchase a rumored $500 million - $700 million stake in the company, but the deal fell through amid claims that Alibaba was valuing the Indian firm in the range of $4-5 billion against a valuation of $6-7 billion sought by Snapdeal.

India is the second-most-populous nation in the world, and an increasing number of investors are plowing their money into the country's online businesses. "India is a legitimate market for e-commerce and it has become a battle where staying power will matter," Ashish Gupta, senior managing partner at Helion Venture Capital, told the Economic Times.

The popularity of mobile shopping has skyrocketed in India, thanks in part to cheap data prices. As of December, India users on average pay 0.5 cents per megabyte used, which is two times cheaper than in China, and almost three times cheaper than in the United States, according to a recent Goldman Sachs report. By 2020, India's Internet market is expected to grow to $137 billion from $11 billion in 2013.