Under the terms of the deal, Alibaba and Alipay would hold between 30-40% of One97 after the investment. One97 runs Paytm, an ecommerce platform which consumers can access through mobile applications.
The investment will be used to boost Paytm services, with a view to dominate the online payment business that is expected to grow in the following years in India. India has the world’s third-largest internet user base, but ecommerce is still relatively underdeveloped. Nomura estimated in a research note in July 2014 that India’s ecommerce industry could more than quadruple to USD 43 billion over the next five years.
The investment by Alibaba is expected to be announced by the end of January 2015.
Alibaba Group is a Chinese ecommerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web portals. It also provides electronic payment services, a shopping search engine and data-centric cloud computing services.
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