Alibaba hikes stake in Paytm

Paytm is the vehicle for Alibaba’s e-commerce venture in India. In 2016, the Chinese online retailer contemplated a standalone entry into India or an acquisition. For now, the company has decided to raise its stake in Paytm for its e-commerce ambitions.

Paytm is expected to spin off its e-commerce business into a new mobile application and a separate website. The new platform will be named Paytm mall—inspired by Alibaba’s T-mall in China. The existing Paytm app will continue to have a link to the commerce business. Alibaba, which already runs a business-to-business platform in the country, will help Paytm in hiring more senior executive staff and will deploy some of its executives from China.

Paytm’s payments as well as the e-commerce business have grown more than five-fold since November 8. Its gross merchandise value—or value of goods sold through the digital platform—has crossed five billion dollars. About 20 to 25 per cent of this comes from Paytm’s e-commerce marketplace. Paytm started out as a mobile payments and mobile recharge business and today ranks among the top three consumer internet companies in the country. The company has aggressively built its e-commerce marketplace during the last two years by selling apparel, footwear, smart phones, bus tickets and movie tickets.