Getting a right merger partner is a very crucial element for any business that wishes to expand by forming strategic alliances throughout its journey. We see many big companies acquiring smaller ones that help them to strengthen one area of its operations. Like Snapdeal buying Letsgomo to make its mobile platform stronger or Housing acquiring HomeBuy360 to make their operations more efficient.
Very rarely do we see a merger like Alibaba and Paytm, where the big fish helps the small fish to operate independently, scale up at an unbelievable pace and work on all of its weaknesses.
Alibaba has changed Paytm’s outlook
IOS had explored the strong camaraderie between Alibaba’s Jack Ma and Paytm’s Vijay Sharma in this article. We talked about how Alibaba plans to help Paytm to scale up and leave domestic competitors such as Flipkart, Amazon and Snapdeal far behind.
Speaking about this positive change in attitude, Sharma said, “Alibaba made us look and think different like a large company and not a startup. Our outlook of business execution has changed now. Earlier I was bothered about getting 100 million or 500 million users. Now it’s what potential new businesses we can do with this large user base.”
Paytm’s jump from newbie list to the biggies list due to Alibaba
The moment any chink in Paytm’s armour is exposed, Alibaba steps in with experts in tow and irons out these chinks. Paytm had 4 risk managers earlier, Alibaba got 15 risk profile engineers from China. From 200 servers, the bills & payment company plans to expand to 1,500 servers.
A wallet business needs to have secure platform, right? No problem, the Chinese marketplace steps in again. Read this: “We are developing a new risk management product for Paytm. We have seen and done that in China. Now we are implementing the same here,” said an engineer from Ant Financial – Alibaba’s finance arm that bought stake in Paytm.
Sharma added, “With Alibaba the time to market shortens and our vision to scale multiplies. (Without Aibaba) I would have got the money and spent it, but would not have been sure what to do. I have a partner who knows what to do.”
Whether it is helping Paytm to build the biggest payment cloud in the country, expanding product/service portfolio, workforce training & development, taking them to the global market, or advising them to build partnerships with other companies, Alibaba is doing it all.
Sure, there is personal gain in play for the Chinese ecommerce leader, but at the end of the day, it’s the ecommerce industry and economy as a whole that will benefit from it.
Will the efforts pay off? Will Paytm-Alibaba manage to push others off the cliff? Or India’s complexity ends up being too puzzling for the Chinese player? Answers to all we’ll know in the coming times.