Paytm E-Commerce Pvt. Ltd, the online marketplace arm of One97 Communications, is in talks to raise $200-252 million (Rs 1,350-1,700 crore) from an investment from Chinese company Alibaba Group Holding Ltd, which is world’s largest ecommerce company valuing the online retailer at about $1 billion.
A deal will confirm that Paytm will continue to be the vehicle for Alibaba’s e-commerce play in India. By 2020 the ecommerce market in India is likely to grow upto around 5000 crores to 5500 crores industry according to a report by Google and AT Kearney.
“India is an important emerging market with great potential and we are absolutely committed to developing it for the long term…While we are excited about addressing the market opportunity in India, we are not in a position to share any forward looking information with you at this moment.”
Paytm recently separated its wallets and online commerce businesses. The commerce business was introduced in 2014, though it has remained a secondary source of revenue for the company which has remained a mainly digital payments website so far. The company has also received payments bank licence from the Reserve Bank of India. Paytm is likely to launch a payments bank by month-end.
In August 2016, Paytm had created two separate entities, Paytm E-Commerce and Paytm Payments Bank Ltd, to run its e-commerce and banking services, respectively.
Paytm, which started out as a mobile payments and mobile recharge business, today ranks among the top three consumer Internet companies in the country. The company has aggressively built its e-commerce marketplace during the last two years by selling apparel, footwear, smartphones, bus tickets and movie tickets.
It has created a web of payment solutions in the offline and online channels where consumers can transact via the Paytm wallet. The company said in November that its gross merchandise value—or value of goods sold through the digital platform—had crossed $5 billion. About 20-25% of this came from Paytm’s e-commerce marketplace.