International

Why Alibaba Is Doubling Down On India's Paytm

Alibaba and Ant Financial — the eCommerce firm's financial services affiliate — have moved to make a second big buy into Paytm, an India-based mobile payments and eCommerce firm. This follows an undisclosed investment by Alibaba and Ant in Paytm earlier this year — funding that reportedly left the Indian company with a valuation of around $1 billion.

Paytm's business model is often compared to that of Alibaba's, though at an earlier and less developed level. The firm's range of services include a mobile wallet app, online recharge of pay cards and shopping services.

Paytm's mobile wallet has a reported 100 million users and logs more than 75 million transactions each month.

Once again, the details of the deal have not been officially disclosed; though according to India’s Economic Times, Alibaba will be buying 20 percent of Paytm for $680 million. Ant Financial's stake, on the other hand, will decline from 25 percent to 20 percent.

Vijay Shekhar Sharma, founder and CEO of Paytm, said the company is looking “to bring half a billion Indians to the mainstream economy and help millions of small businesses leverage this large mCommerce opportunity.”

India of late has been an increasingly large and attractive target for U.S. tech investors, particularly as economic conditions in China have made it a less conducive environment for growth. Alibaba apparently sees a similar opportunity.

“India is an important emerging market with strong eCommerce potential, and we look forward to partnering with Paytm to deliver innovative products and services to consumers ... This investment will further expand Alibaba Group’s global footprint to India’s thriving mobile commerce market,” Alibaba CEO Daniel Zhang said in a statement.

To check out what else is HOT in the world of payments, click here.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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