21 March, 2016, Bangalore: Seems like Alibaba Group is getting all the support it needs to venture into the Indian market. In the recent development, India’s leading online payment company, Paytm has shown interest in spinning off its marketplace to allow China’s Alibaba Group to establish a direct presence in the world’s fastest growing ecommerce market.
Chinese ecommerce giant already has 40 per cent stake in Paytm. Now, Indian company has asked for additional investment of US $300 -400 million from the Chinese group. Both the companies are in talks to finalise the deal, informed by the source. However, he declined to disclose the valuation on which the funding will be raised.
“Paytm may spin off its marketplace business, which will have Alibaba as a majority stakeholder in that company and allow (the Chinese firm) to organically expand in India,” a source revealed. Alibaba and Paytm declined to comment on what they said was market speculation. Alibaba declared on Friday that it would enter the ecommerce business in India this year, after a meeting with Communications and Information Technology Minister Ravi Shankar Prasad, reports ET.
As per the report submitted by the Goldman Sachs, India’s online retail marketplace will expand to US $36 billion in 2016-17 from US $11billion in 2014-15. This also means that it will become one the World’s biggest battle grounds for online firms.