PayTM.jpg (Photo : Times of India)
An unidentified source revealed to the media on the weekend that Alibaba Group Holding could target Paytm, an Indian mobile payment start-up, for a $575-million investment in 2015.
The unconfirmed news is seen as the first major decision in the developing-economies focus that China's largest e-commerce business is expected to take this year.
If the information, which was reported by the Wall Street Journal on Saturday, is accurate, then Paytm will join the billion-dollar start-up club, with a subsequent value of $1.5-1.9 billion.
According to India's The Economic Times (ET), Paytm--a division of India's Alibaba counterpart, One97 Communications Ltd.--is in the latter stages of negotiations with both Alibaba and Singapore-based Temasek Holdings to raise a total of $500 million. Again, an anonymous source was referred to, who told the publication that an announcement is expected at the end of January.
The Global Times spoke with Beijing-based market research analyst Tang Jia, who said that after a successful and historic 2014, Alibaba is not aiming at developed nations, such as the U.S., where it invested $15 million in New York-based 1stdibs one year ago. Tang explained that developed markets are "dominated by Amazon and eBay," so economies like those of Russia and India are of greatest interest.
Tang's statement was reaffirmed by another analyst, Wang Tingting, who said to the Global Times:
"E-commerce in developed markets is quite mature. . . . Given the good economic prospects, the Indian market offers huge opportunities. Tapping the market also paves the way for Alibaba to expand into the Southeast Asian market."
Wang further explained that Paytm would be part of an overall strategy for Alibaba, as "the political and cultural hurdles . . . in a foreign market" mean that investing in a local platform is more likely to succeed.
The Gartner research firm has forecast that India's e-commerce market will rise from $3.5 billion in 2014 to $6 billion this year.
