Paytm to spin off marketplace, paving way for Alibaba entry
Paytm will spin off its marketplace business next month, a top company source said, setting the stage for China’s Alibaba to establish a direct presence in the hotly competitive Indian online retail space, according to an Economic Times report.
“The contours of the spinoff, paperwork and board members are being finalised and the official launch is planned in November,” said the source. “India is an important market and Paytm is an important strategic partner,” an Alibaba spokesperson said, declining to comment on speculation regarding the spinoff.
The Indian online retail market is dominated by Flipkart and Amazon, and the former is in talks for a financial and strategic backing from America’s Walmart.
The Alibaba group has been present in India through Paytm and Snapdeal, and a direct entry for the Chinese ecommerce group is expected to heighten competition and result in a shakeout in the industry.
In August, ET reported that Alibaba plans to debut its business-to-consumer site Tmall in India, with Kishore Biyani’s Big Bazaar being one of its key sellers.
“We expect 10 million transactions in three days,” said Saurabh Vashishtha, the vice president for business and product management of Paytm’s ecommerce marketplace.
“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”, he added.
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