Alibaba, the number one eCommerce company in China, is setting its sights on India, raising its stake in Paytm E-Commerce Pvt., the Indian eCommerce arm of the payment company.
According to a report, in a regulatory filing Paytm E-Commerce disclosed it raised $200 million in venture funding from venture capital fund SAIF Partners and Alibaba. With the investment, the Chinese eCommerce giant, through Alibaba.com Singapore E-Commerce Pvt., gets a 36.31 percent stake after investing $177 million. SAIF Partners, which invested $23 million, gets a 4.66 percent stake with its investment. Alibaba and Ant Financial, its affiliate company, already owned a 40 percent stake in Paytm with an investment of $500 million in 2015. Alibaba now holds a majority of Paytm E-Commerce with the latest investment.
The report noted that last year Paytm announced it would spin off its eCommerce business from its payments business. Paytm is aiming to take on the leaders in eCommerce in India, which are currently Flipkart, Amazon and Snapdeal. Unnamed sources in the report said Paytm intends to sell nearly 1 billion products from merchants in Southeast Asia. If it does that, it will greatly surpass what its rivals are selling online.
The move to split up the two units has been being pushed behind the scenes by Alibaba and Ant Financial, its financial services unit, noted the report. At the same time that Paytm is focusing on its eCommerce efforts, it is also aiming to grow the payment side of things. In late December, the company said it plans to add new features and services to its payment service that will help it reach its goal to have 5 million merchants accept and make digital payments next year. What’s more, Paytm is planning on working with sales and distribution firms to accept Paytm payments from merchants. By doing that, merchants would have another reason to use Paytm.