Alibaba, Ant Financial Invest in Paytm (Sept. 29, 2015)
Chinese e-commerce giant Alibaba and its affiliate Ant Financial announced today an agreement with India’s One97 Communications Ltd. to invest in Paytm, an m-commerce platform and One97 subsidiary. Paytm is India’s largest mobile commerce platform with a current user base of more than 100 million, according to the company.
The capital infusion will enable Paytm to achieve greater scale and develop its m-commerce and payment ecosystem in India and invest in marketing, technology and personnel. The companies did not disclose specifics of the deal; however, some reports estimate the investment at approximately $600 million. Ant Financial made an initial investment in Paytm in February 2015, but Alibaba will become a new investor in Paytm after the completion of the transaction. For Alibaba, the investment enables the company to continue expanding its e-commerce business globally.
Though the biggest e-commerce markets in Asia-Pac countries currently are China, Japan and South Korea, India’s spend is expected to match that of China within a decade, according to a white paper released today by MasterCard, “Ten Industry-Wide Transformations Impacting E-Commerce in Asia Pacific and Implications for Growth.” What’s more, the Asia-Pacific middle class is projected to expand to more than 1.7 billion people, and China, India and Indonesia will be the top three countries for e-commerce growth in the next two to three years. The region also is experiencing “extraordinary” investment growth of e-commerce businesses, such as Alibaba’s $25 billion IPO last year, the report said.