Alibaba had locked the year 2016 for its entry into the Indian ecommerce industry. When it didn’t happen, many thought that the Chinese ecommerce leader has developed cold feet. While we were waiting for Alibaba to announce its direct entry, Jack Ma is already here through Paytm.
According to news reports, Alibaba would be investing $177 million (Rs. 1180 crore) in Paytm’s shopping platform Paytm Mall. This would enable the China-based company to increase its stake considerably in the Indian firm.
In August 2016, there were reports that Alibaba is looking to grab majority stake in Vijay Shekhar Sharma’s Paytm. Last month IOS reported how Jack Ma’s firm controls 40% of Paytm’s business.
A few days prior to launching Paytm Mall, Sharma had declared that they are looking to raise a sizeable investment for its ecommerce marketplace and that it would be one of the biggest funding rounds.
And now with news of $177 million coming into the company, it is indeed turning to be the way Sharma said. In addition, Alibaba’s stake in Paytm now accounts to 62%!
However, a company insider disclosed that Alibaba’s stake would reduce in the future to make way for ESOP. The source said,
“This (the Alibaba shareholding) will come down as the company creates a large employee stock option pool (Esop) to attract and retain talent. We want to build this (Paytm marketplace) into the market leader of ecommerce in India, and Esop will be for both new and existing employees.”
On one hand, employees are either leaving or being fired from Flipkart and Snapdeal, on the other hand Paytm-Alibaba are thinking about employee stock options. As for Amazon India, Jack Ma can easily match Jeff Bezos’ huge wallet.
So what does this mean for the current industry leaders? Industry experts believe that Snapdeal and Paytm would merge. This leaves Flipkart and Amazon to battle it out with the Chinese ecommerce biggie.
It seems that the very soon the Indian ecommerce leadership board would change. But in which direction, that’s hard to tell. One thing is clear that Alibaba-backed Paytm would have to fill the gaps that’s left open by the existing players to win the Indian ecommerce market.
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
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