INDIA > Alibaba to Invest About $575 Million in Indian Online-Shopping Service, Paytm

On July 22, 2016 by admin



Source of this article is Wall Street Journal. See

China’s Alibaba and Affiliate Zhejiang Ant to Take 30% Stake in One97 Communications, Source Says

BANGALORE, India—Chinese e-commerce giant Alibaba Group Holding Ltd. and its financial-services affiliate have agreed to jointly invest about $575 million in India’s One97 Communications Ltd.’s online-payment and marketplace businesses, a person familiar with the matter said.

If the deal goes ahead, it would give Alibaba and Zhejiang Ant Small & Micro Financial Services Group a combined 30% stake in One97 and would value the New Delhi-based company at more than $2 billion, the person told The Wall Street Journal.

A spokeswoman for Alibaba didn’t immediately respond to a request for comment. A spokeswoman for One97 said the company is in the process of raising money. “We will communicate as and when we complete the process,” she said.

The investment would be the Chinese group’s first in India’s small, but fast-growing, e-commerce industry, which has drawn substantial funding from Inc. of the U.S., Japan’s SoftBank Corp.and others betting that online shopping is set to boom in the world’s second-most-populous country.

Alibaba, which went public in the U.S. in September in the world’s largest initial public offering at $25 billion, mainly operates online marketplaces. Its financial-services affiliate runs Alipay, whichprovides online-payment services.

The Chinese group’s funds would go to One97’s Paytm unit, which also handles online payments and operates an Internet marketplace that Indian customers can use through their mobile phones the person said.

Alibaba has been moving to expand its services beyond its home countryto allow more merchants abroad to sell to Chinese consumers, and Chinese sellers to tap into markets outside China.

Paytm says its marketplace has about 15,000 merchants, selling items from electronics to clothes and accessories, and has 25 million registered users. It has 20 million mobile-wallet users and counts taxi-hailing service Uber Technologies Inc., travel portal ExpediaInc. and apartment-rental site Airbnb Inc. among its customers, the company says.

Under the terms of the new agreement, which requires Chinese regulatory approval, Indian customers would be able to shop on Alibaba sites by making payments through Paytm, while Chinese customers can use Alipay to buy from merchants selling on Paytm’s marketplace, the person familiar with the matter said. Sellers on Alibaba’s sites would also be able to list their wares for sale on Paytm, and vice versa, the person said.

The funds from the Alibaba investment would be mostly used to expand Paytm’s marketplace operations and develop payment technologies, the person said. As part of the agreement, Paytm would gain access to Alipay’s payment technologies, including its payment gateway, mobile-wallet system and antifraud measures.

—Gillian Wong in Hong Kong contributed to this article.