On Tuesday, Alibaba and its payments arm Ant Financial Services Group made fresh investments in One97 Communications-run Paytm, which according to sources is about $680 million. With Alibaba Group's total investment of almost $900 million in the company, experts believe Paytm can now comfortably go on a fast track with its expansion plans, which include setting up a payments bank, investing almost $200 million in upcoming start-ups and adding more subscribers to its mobile wallet.
Experts also believe that this round of funding paves the way for Paytm to proceed with its expansion plans. "The business of Paytm is much appreciated in the e-commerce segment. This round of funding will give a considerable amount of headroom to the company to work on its expansion plans. The way the e-commerce segment is growing in India, this investment has come at the right time for the company," said Viresh Oberoi, chairman of the National E-commerce Committee at Confederation of Indian Industry.
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He added that this investment also reinforces the faith of international players in Indian e-commerce companies.
"Not only Western, even Chinese companies are now realising that the e-commerce industry in India is here to stay. We will see more such investments in Indian companies in the future," added Oberoi.
Vijay Shekhar Sharma, the founder and chief executive of the company, has made it clear that with the fresh round of investments from Alibaba, Paytm is going to be a dominant e-commerce player in India.
"With the Alibaba and Ant Financial partnerships, we look to bring half a billion Indians to the mainstream economy and help millions of small businesses leverage this large m-commerce opportunity," he said.
Though Alibaba or Paytm have not made any sort of announcements, according to sources, the Chinese e-commerce giant plans to enter the Indian online marketplace in a big way. It is already selling its products via Paytm. It could be gauged from the fact that Paytm is planning to flood the market with Alibaba's product catalogue during this festive season and take its competition head-on in the e-commerce arena.
Alibaba and its merchants would be directly shipping products across to customers, saving Paytm the hassle of finding warehouses. "On Diwali, we are going to flood this country with gift items, all coming from China," Sharma had said.