PayTM Mall or PayTM Bazaar

The Economic Times - - Fi­nance & Com­modi­ties -

“The on­line mar­ket­place busi­ness will ei­ther be called PayTM Mall or PayTM Bazaar,” said the per­son who es­ti­mates the busi­ness has an­nu­alised gross mer­chan­dise value (GMV) of about $1 bil­lion. The clo­sure of the deal is ex­pected to be for­mally an­nounced in the com­ing weeks. Paytm de­clined to com­ment.

A rep­re­sen­ta­tive for Alibaba said the com­pany re­gards In­dia as an im­por­tant emerg­ing mar­ket with great po­ten­tial and is ab­so­lutely com­mit­ted to de­vel­op­ing this mar­ket for the long term. “How­ever, we do not in prin­ci­ple dis­cuss ru­mours about our busi­ness plans,” she said in an emailed re­sponse.

For Alibaba, en­ter­ing the In­dian mar­ket will mark an ex­pan­sion of its global foot­print and of­fer a chance to grab a slice of one of the world’s most at­trac­tive mar­kets for on­line re­tail, which is es­ti­mated to be worth $1416 bil­lion at the end of 2016, up from about $11 bil­lion in 2015, ac­cord­ing to an­a­lysts and in­vestors.

Alibaba was ex­pected to be- gin busi­ness in In­dia as Tmall, its busi­ness-to-con­sumer brand in China, in or­der to dif­fer­en­ti­ate its busi­ness from Paytm’s dig­i­tal pay­ment brand. But the on­line mar­ket­place will now con­tinue un­der the Paytm brand.


Ex­perts are of the view that Alibaba has an ad­van­tage in the busi­ness-to-busi­ness sec­tor where there aren’t too many com­peti­tors.

“Also it has done very well in bring­ing small ven­dors to cus­tomers in China,” said Pi­naki­ran­jan Mishra, part­ner, EY In­dia.

ET first re­ported the news of One97 spin­ning off its on­line mar­ket­place unit as a way to fa­cil­i­tat­ing the en­try of Alibaba into the In­dian mar­ket, in Fe­bru­ary 2016.

Reg­u­la­tory fil­ings made by Paytm E-com­merce show that it has al­ready is­sued shares to share­hold­ers of One97 Com­mu­ni­ca­tions, most re­cently to Alibaba and Ali­pay.

The lat­est trans­ac­tion also marks the com­ple­tion of the re­or­gan­i­sa­tion of One97 into two dis­tinct units — the pay­ments bank Paytm Pay­ments Bank Lim­ited, and on­line mar­ket­place Paytm E-com­merce. This process be­gan in Au­gust 2016. The ecom­merce ser­vices busi­ness, which in­cludes tick­et­ing and off­line pay­ments at petrol pumps, will con­tinue un­der One97, founded by in­ter­net en­trepreneur Vi­jay Shekhar Sharma.

Paytm also trans­ferred its wal­let li­cence to the pay­ments bank unit last year, which is ex­pected to launch op­er­a­tions in the next few months. Sharma owns a 51% stake in the pay­ments bank while the rest is owned by One97 Com­mu­ni­ca­tions.


The lat­est deal, the first sig­nif­i­cant trans­ac­tion in the In­dian ecom­merce in­dus­try this year, is ex­pected to lead to a shake­out in the sec­tor, which has wit­nessed a tough bat­tle be­tween Flip­kart, Ama­zon and Snapdeal. Ama­zon has picked up mar­ket­share with its ag­gres­sive spend­ing even though the pace of growth has slowed.

“It is a great news for the in­dus­try as there is a large player to take on Ama­zon, and this could lead to ac­qui­si­tion of play­ers,” said the founder of a ver­ti­cal on­line re­tailer.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.