Global tech giants are heading for a proxy war in India. Alibaba is leading a USD 200 million investment into Paytm’s marketplace, creating a new Indian unicorn. It confirms the intention of the Chinese behemoth to take on Amazon, which is aggressively ramping up, investing USD 5 billion into its local operation as other homegrown rivals flail. Only one of the tech big boys will emerge victorious.
The USD 255 billion Chinese group and Paytm have already invested together to build a dominant mobile-wallet payment business, now worth around USD 5 billion. Their smaller e-commerce unit is now being separated out to meet Indian regulations. After the latest fundraising, Jack Ma's Alibaba and its own payments affiliate Ant Financial will effectively control the e-commerce company and continue to own a large stake in the payments arm, which must be majority Indian-owned.
Local rivals Flipkart and Snapdeal, backed by New York investment firm Tiger Global and Japan’s SoftBank, respectively, helped to establish the domestic e-commerce industry. But their future roles look uncertain as these global tech giants, with deeper pockets, get stuck into the market.
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