Alibaba advances Indian Ecommerce position with additional $45 million investment
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Alibaba advances Indian Ecommerce position with additional $45 million investment

Chinese Ecommerce giant Alibaba is looking to take the fight to Amazon in India with an additional $45 million investment in Paytm E-Commerce Pvt. Ltd. (“Paytm Mall”), which competes with Amazon, and home-grown Ecommerce service Flipkart, locally. Alibaba is already the biggest shareholder in the company, but a $400 million investment from SoftBank Group will diminish its holdings slightly. After this funding round, Paytm Mall will be worth $1.9 billion – and Alibaba will remain its biggest owner, with a 30% stake in the company.

Alibaba’s share price has risen by 60% over the past 12 months

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SOURCE: Yahoo Finance

According to Paytm Mall’s chief operating officer, the investments will be put to use beefing up its technology, and building “superior logistics,” amongst other things. Alibaba is looking to see Paytm Mall become a superior player in the fast-growing Indian Ecommerce market, extending its hold on Asian Ecommerce and fighting off Amazon, as well as other, smaller, operations.

SoftBank, which will hold 21.1% of Paytm Mall after this round of funding, has also been looking to capitalize on Indian Ecommerce for some time. The company released a short statement on Monday explaining the company’s value: "We believe Paytm Mall's offline-to-online operating model, combined with the strength of the Paytm ecosystem, is uniquely positioned to enable India's 15 million offline retail shops to participate in India's e-commerce boom."

With India fast becoming a major focus for global Ecommerce, whoever gets the earliest firm footing in the country will be in a strong position to redefine the sector globally in the coming decades. Alibaba may not be there yet, but it’s looking like a dangerous contender.

Disclosure

Dominion holds Alibaba and Amazon in its Global Trends Ecommerce Fund.


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