Alibaba has planned its formal entry in India through a new online marketplace. To achieve this they plan to invest between Rs.1,350 crore and Rs.1,700 crore ($200-252 million) in the online marketplace which may be called PayTM Mall or PayTM Bazaar.
A report from The Economic Times said that people close to the decision makers have estimated that Paytm’s retail marketplace has been valued at $1 billion. The deal has not been finalised yet, but an announcement of the same may be made in a few weeks.
The breakup of ownership will be such that Alibaba and Alipay will own 50% of the company, which will be over 10% more than their current 41% stake in the company. SAIF Partners will own 30% and the founders of Paytm will own 20% of the company.
Alibaba’s entry into India through the new online marketplace will mean stiffer competition for e-commerce companies like Amazon and Flipkart. The stiff competition comes from the fact Alibaba is one of the biggest e-commerce companies in the world that provides B2B, B2C and C2C services and, like Amazon, has a lot of resources and experience that it can bring to bear on this, their new endeavour.