B2B Payments

Alibaba’s Even Larger Global Stake In Mobile Payments

Ant Financial, an affiliate of the Alibaba Group, announced Feb. 5 that it will take a 25 percent stake in Indian mobile payments company One97, according to TechCrunch. This move appears to line up with Jack Ma’s vision of getting Alibaba more involved in India, which is the largest consumer base for his company after China.

The exact dollar figure on the deal was not disclosed, though sources told Reuters on Jan. 11 that the stake could be worth about $550 million. This investment by Ant Financial, which was spun off from Alibaba in 2011, though Ma still owns a stake in the company, is the first one in India for the Alibaba Group. One97 is the Indian company that owns Paytm, an Indian mobile payment platform similar to Alipay, though with only 23 million users compared to Alipay Wallet’s 190 million. Paytm representatives lauded the investment, which will be used to grow Paytm’s mobile platform as well as to help expand online commerce in India.

As of 2014, according to research firm Gartner Inc., India’s e-commerce market is estimated to grow to $6 billion this year, a 70 percent increase from 2014, though it only represents 4 percent of the retail market, about half of the share of the American market. Leading the way in India’s e-commerce growth are B2C companies, which are expanding their commerce platforms as a result of various mergers within the country. According to Gartner, this may present a problem because of multiple payment models available in India and low average order value. As a result, B2B platforms will have to improve in order to make supply chains more efficient and engage with customers across various channels.

In this environment comes Paytm and Alibaba, which consider India an underserved marketplace that has the potential to grow with careful investments in digital platforms. Speaking to The Times of India, Ma referenced a stronger relationship between India and China as the foundation for greater economic cooperation.

“If both nations work together they will benefit from each other. These two nations have great culture and are influenced by new technology. I believe this is a great opportunity for entrepreneurs of both nations to work together to improve the culture, and the world,” Ma remarked.

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