Alibaba may not be selling directly under its own brand name in India, however, it seems to control major stake of a big deal Indian ecommerce company. With a Rs.1700 crore investment in Paytm, the Chinese etailer will secure almost 40% of Paytm’s online retail business, state regulatory filings from Tofler, a business research platform.
Many of those aware of Alibaba’s plan for Indian ecommerce claim that this move (to invest in Paytm) is the firm’s entry into our ecommerce market. This is even though the company is not fully immersed in online retail operations here.
Paytm did not make any statement about the investment, but Alibaba’s spokesperson mentioned, “India is an important emerging market with great potential and we are absolutely committed to developing it for the long term…While we are excited about addressing the market opportunity in India, we are not in a position to share any forward looking information with you at this moment.”
Paytm is looking to raise fresh funds of $200 million. It has met with other external investors too for the same. It has spoken with Canada Pension Plan Investment Board (CPPIB) about an asking valuation of $1 billion, claimed sources.
The Indian online retailer has been actively engaged with the potential Canadian investor that manages $200 billion pension funds.
Another source stated, “The company is also negotiating a deal with a southeast Asian investor for the financing round planned for the online commerce business.”
With new investments likely to come in soon, what is Paytm’s plan for its ecommerce business? The etailer is one of the most improved in online retail and with help from Alibaba it could quite possibly take on the hotshots of Indian ecommerce – Flipkart and Amazon. And, maybe even defeat them.