The inside story of Alibaba’s strategic partnership with Indian mobile wallet company Paytm
Tuesday, June 2, 2015
Eight months ago, the two scheduled a 20 minute meeting. They ended up talking for two hours. It was personal chemistry as much as business rationale that led to Alibaba’s financial arm investing $500 million in Paytm. Shelley Singh finds out how the two friends now plan to challenge the dominance of Flipkart, Amazon and Snapdeal in the $20-billion Indian e-commerce market.
Since February this year, a flurry of executives have been travelling the 6,000-km distance between Alibaba’s headquarters in Hangzhou and Paytm’s base in Noida with an urgent frequency. “It’s as if Jack Ma is conducting an executive MBA for Paytm executives,” says Vijay Shekhar Sharma, founder, One97 Communications which runs Paytm (Pay Through Mobile). Ma is the founder of Alibaba, China’s popular e-commerce company, which sells products worth $200 billion annually. “Ma tells us we should build a company that is worth a Nobel Prize,” Sharma adds.
The new friendship between Ma and Sharma, 35, follows a deal in February this year in which Ant Financial, the finance arm of Alibaba, invested about $500 million for a 25 per cent stake in Paytm, India’s largest mobile wallet company. Sharma’s team at Paytm needs that executive MBA from Ma and more as they pivot from being a mobile payment outfit to a full-blown e-commerce company challenging the dominance of Flipkart, Amazon and Snapdeal.