Alibaba would support Paytm’s China product portfolio, as its product range may power Indian company’s China-to-India play.
Alibaba Group is about to take an initiative to lead the online market of India this year. While the Chinese ecommerce organization has already made an investment in Snapdeal and Paytm, big India play of the Hangzhou-based company would be able to go beyond financing.
Vijay Shekhar Sharma, CEO and founder of One97 Communications, owner of Paytm, has been able to keep aside $400m for extending its ecommerce business in the second most populated country. Alibaba’s India play would coincide with the growth of Paytm. To compete with online trading enterprises such Amazon India, Snapdeal and Flipkart, Paytm aims to push ‘China to India’ commerce.
For this, it would be relying on Alibaba and other Chinese corporations for its product portfolio. After investing $680m, the Chinese online trading platform has become the biggest shareholder of One97 Communications. “In 2016, we will promote our online marketplace business in a big way. China-to-India commerce will be a focus area. While competition is concentrating on selling mostly smartphones, we will expand in other verticals; there is a lot we can offer to Indian consumers,” stated Vijay.
Sources explained the Alibaba would be supporting the Paytm’s China product portfolio. With its support, the latter would plan to turn into the largest Indian player up till now as far as the number of vendors on its platform is concerned. With more than 8 million vendors, Alibaba is known for having the most extensive product range.
Paytm aimed to sell the product range of Alibaba before as well. During Diwali in 2014, Paytm was able to source the entire product range from the Chinese company and Chinese vendors were directly selling goods to customers in the emerging economy, which helped Paytm in the hassle of searching for warehouses.
“This is our Alibaba catalogue. We will be offering products under various categories, such as home garden, gifts, personal accessories and food,” Vijay had then stated.
With investments worth $40m to push Paytm’s electronic marketplace growth strategy, it aims to bring 100m ‘stock keeping’ units from China to India. Now, it has about 100,000 vendors on its marketplace. Compared to that, Snapdeal has almost 200,000 merchants and FlipKart has about 80,000.
Paytm is aiming to take a multi-prolonged approach to dominate the market. It aims to introduce its much-awaited payments banking institution and targeted 100m accounts within a time span of 2 years of the establishment of the bank. It is also interested in adding to its base of mobile wallet users, at 120 million at present.
Jack Ma’s company was able to keep aside $650m for its entire growth plans. It is relying on its 120 million mobile wallet users to aim at a current customer base for its online trading plans.