We had reported earlier that Alibaba is going to enter the Indian market directly and Paytm is already setting the stage for Alibaba, by spining off its marketplace in November. According to sources paperwork and board members are being finalised and the official launch is planned in November.
Paytm is also planning its own three-day festival sale starting October 12, before the spinoff. The selling point will be cashback offers totalling over Rs 100 crore by merchants on its platform. The sale will focus on customers in smaller towns and cities and categories including kitchen, fashion and home furnishings. Saurabh Vashishtha, the vicepresident for business and product management of Paytm’s ecommerce marketplace, said in a statement:
“We expect 10 million transactions in three days,…This year we have lined up total benefits of more than Rs 1,000 crore including cashbacks and discounts on three days of the Maha Bazar Sale.”
We had reported in August that Chinese internet giant Alibaba, which plans to enter the domestic e-commerce market, has held talks to acquire one of the top takeover targets in Indian e-commerce, ShopClues. The venture is valued at over USD 1 billion currently. Alibaba wants to merge the marketplace of Paytm, in which it has a stake, with the much bigger rival ShopClues. It is also prospecting several acquisition targets to firm up its stand in India against rival Amazon.
Alibaba group, which holds about 40% stake in Paytm, has already started the process of separating the Noida-based company’s core payment business and the smaller commerce business into two separate entities. Alibaba is keen on migrating the struggling marketplace of Paytm into one of the larger combinations it is pursuing in the country.
The Alibaba group has been present in India through Paytm and Snapdeal, and a direct entry for the Chinese ecommerce group is expected to significantly increase the competition.