Alibaba Group, the Chinese eCommerce giant, is the lead investor in a new round going to Paytm E-Commerce, the Indian online retailer.
According to a report, citing a person familiar with the matter, Alibaba is leading the $200 million round. The other investor in the round is SAIF Partners, noted the report. With the $200 million funding, Paytm has a valuation of $1.1 billion. The move on the part of Alibaba gives it a bigger presence in India’s eCommerce market, which is dominated by Amazon and Flipkart. Amazon, Flipkart and Snapdeal, which is also backed by Alibaba, have been fighting to gain the number one position in the market and are spending a lot of money to enhance their delivery capabilities and lure shoppers via promotions and discounts. The report noted that Amazon has already pledged $5 billion in India to be the leader in eCommerce.
For Alibaba, the internet giant has yet to enter the India market directly, opting instead to make passive stakes in startups that serve the market. That may change in the future, though, since Alibaba is aiming to grow outside the Chinese market, which is slowing. Alibaba has a goal of deriving 20–30 percent of its sales from outside of China. As for Paytm, with a valuation of $1.1 billion, it has become India’s latest unicorn.
In June, Alibaba set its transaction volume sights high for the next four years, saying that, by 2020, it hopes to double its annual transaction volume to more than $1 trillion. “What I can share with you is that, in four years, we have a very clear goal, which is, in fiscal 2020, Alibaba wants to be the first company to have a retail market base scale of over $1 trillion, so that is our clear goal in the next three to four years,” CEO Daniel Zhang said at a conference at the time. Alibaba also projected a 48 percent increase for the fiscal year ending in March, as its executive team attempted to calm investors’ concerns about its growth. Despite China’s economic slump and increased competition, Alibaba is optimistic about its forecast.
