The Chinese e-commerce giant Alibaba is set to announce an investment of some $550 million into Indian based e-commerce company One97 Communications. The India company runs an e-commerce platform called Paytm, which is accessed primarily through mobile apps by its customer base. Reuters broke the news, citing unidentified sources close to the deal. Alibaba is interested in expanding the Paytm service in India.
The Chinese mobile payments market is the most rapidly growing world wide and Alibaba and its subsidiary Alipay already have a strong grip on the region. India is a territory that has massive potential for mobile payments and commerce as we have discussed in the past. Alibaba's investment in the region could well and truly cement its position as a mobile payments leader globally. In 2014, half of Alipay's transactions were completed over mobile devices - the company will be hoping to replicate such success in India.
Sources say that a deal will be announced at the end of the month. It's reported Alibaba will own between 30 and 40 per cent of the shares in the company. Existing shares will be diluted in the process as One97 would look to issue new shares in the deal. Mobile World Live also suggest that Amazon and Temesak have showed interest in doing a deal with One97. At this time there has been no official word from any in the companies involved other than a spokeswoman of One97 confirming the company is in the process of raising funds.
By Matthew Taylor 13th January 2015
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