Close on the heels of Snapdeal launching the Freecharge wallet this month, Paytm announced that Alibaba and Ant Financial has made strategic investments in One97’s flagship brand. Scroll down to know more.
While browsing on Twitter this month, I could witness some bad blood brewing between Freecharge and Paytm. Upon the launch of their Freecharge wallet, Kunal Bahl, Chief Executive, Snapdeal took a dig aimed at Paytm’s claim of having 100 million mobile wallet users. According to the latest developments, China-based giants Alibaba has invested in Paytm via a strategic partnership. The news comes quick after the Chinese eCommerce firm picked up a stake in Paytm’s rival Snapdeal. Alibaba has not disclosed the amount pertaining to the investment. Recently, Ant Financial struck a deal worth $575 million investment in Paytm. The move seems to be aimed as a vision of getting a piece of the Startup boom in India. According to the Economic Times, Alibaba will take a 20 percent stake in Paytm. While Paytm’s core business is mobile payments, the company has recently made significant developments in terms of tapping the eCommerce market in India. Catering to the recent developments in the market, it can be seen that the majority of the companies feel that owning a payment wallet is pivotal to long-term success. Paytm has 80,000 merchants on its platform and is expecting to touch close to 100,000 by the year-end after it allows zero-commission listings. Noida-based Paytm is also backed by venture capital firm SAIF Partners.
Speaking about the investment, Vijay Shekhar Sharma, Paytm founder & CEO, said, “Common investor or not, we always want our wallet to be available across every player.” Sharma added that, “We do have a marketplace but I would like it if users can use our wallet across e-commerce sites. We will continue to dominate and focus on wallet in India. Wallet is a customer’s relationship starting point with Paytm. So it will remain our primary attention. For us, marketplace is the opportunity to complete the other side: the merchant side.” Daniel Zhang, CEO, Alibaba Group, said, “This investment will further expand Alibaba Group’s global footprint in India’s thriving mobile commerce market.” Vijay Shekhar Sharma, further added that, “We believe that in India not many are really serious about the marketplace. Most of them are chasing a vanity number of GMV (gross merchandise value). Merchants use us as a payment option and additionally as a MARKETING channel for their products in the marketplace. It completes the loop. We have an edge there. We will be winners in the long term and we aren’t changing any short-term goals.”