Alibaba Looks to Expand in India

After investing in e-commerce properties native to India, China-based juggernaut Alibaba is rumored to expand even further in the neighboring emerging market.

The company purchased a 25% stake in One97 Communications, the parent group for popular Indian mobile payment service Paytm.

Alibaba agreed to spend $575 million for the stake, valuing the mobile payment service at $2.3 billion.

The valuation isn’t obscene, considering Paytm already handles 25 million orders per month and has 23 million mobile wallet users, while mobile payment volumes is predicted to grow tenfold in 2015.

What’s even more interesting is that, while mpayments are growing, traditional banks are going to see their market share in non-cash payments fall over the next 9 years. This gives companies like Paytm an opportunity to steal revenue from the old financial giants.

It’s unsurprising to see new rumors from India that Alibaba is looking to buy more Indian e-commerce and payments firms. With high growth and low penetration of mobile payments and ecommerce in India, the opportunity to capitalize on many years of high growth is obvious.

So obvious, in fact, that Alibaba isn’t the only company looking to buy Indian e-commerce properties.

The India Times reported that New York-based hedge funds, Singapore tech firms, and the omnipresent Amazon were also looking to purchase Indian e-commerce assets. The Indian e-commerce market is currently $15 billion in size, according to PwC, far below the market size in China or America, especially on a per capita basis.