24 August 2016, India :
Paytm’s founding company, One97 Communications Ltd is all set to create a separate entity for controlling their ecommerce marketplace & payments business. The new name of this entity would be Paytm E-Commerce Pvt. Ltd.
Paytm is India’s largest mobile commerce platform. Paytm started by offering mobile recharge and utility bill payments and today it offers a full marketplace to consumers on its mobile apps. We have over 100mn registered users. In a short span of time the company has scaled to more than 60 Million orders per month. It is the consumer brand of India’s leading mobile internet company One97 Communications.
According to the filing, the company has been split into two separate entities, Paytm E-commerce Services and Paytm Payments Bank. One97 Communications chief Vijay Shekhar Sharma would be the director of both companies. Paytm E-Commerce Pvt. Ltd. will now control both payments and online retail business arm of One97 Communications Ltd.
This is indeed an interesting development, considering the fact that Alibaba holds 41% stake in One97 Communications Ltd; and have been aggressive in recent months to launch their own ecommerce venture in India.
Alibaba believes mobile and payments would be an important strategic asset for it in India. According to a transcript of the earnings call, available on seekingalpha.com, Joseph C Tsai, executive vice-chairman, said: “The other emerging market is in India, where we have decided to play some very strategically located assets in that market. We invested jointly with Ant Financial into a company called Paytm, the largest mobile wallet company in India. We think mobiles and payment are going to be important strategic assets for us in that market.”
They have already planned to open a massive 20,000 sq feet office in Bengaluru, where Flipkart and Amazon has their headquarters. And recently, they poached Flipkart’s HR Head to expand their own operations in India.
Paytm, which is leading in the digital wallet market, aggressively built its e-commerce business in recent years. Apart from this separate e-commerce entity, the company is also spinning off its payment business into separate entity. Paytm Payments Bank Ltd. will be a subsidiary of One97, with Vijay Sharma holding 51% stake. It is set to launch by end of October.
One97 Communications Limited provides telecommunications value added services to telecom service providers, consumers, and enterprises in India, Afghanistan, Nigeria, and Bangladesh. It offers network component services, which include Short Message Service Centres that facilitate the delivery of SMS messages; USSD gateways that enable a subscriber to obtain information on sports results, stock quotes, and the amount of unused prepaid balance on a SIM card; and call management systems, such as pre-call announcements, call forwarding, and call block services.