To capture a larger chunk of domestic online market, China’s e-commerce giant Alibaba has entered into a strategic tie-up with Indian mobile wallet company Paytm. Jack Ma-led Alibaba, through its marketplace AliExpress, will list 100 million stock-keeping-units (SKU) on Paytm, owned by Vijay Shekhar Sharma-led One97.
In documents viewed by FE, Alibaba had sent a pitch to Paytm to start a cross-platform business in India in October last year. Sources in Paytm have confirmed that AliExpress will soon list these SKUs on Paytm, which is pitching to get a higher chunk of the Indian m-commerce market.
According to the document and sources, these products will be listed on Paytm this month. “AliExpress has a lot of sellers and the tie-up will allow Chinese sellers to sell in India. They have more than 1 billion SKUs just for international markets,” said company officials.
Jack Ma has been trying to enter Indian consumer market for more than a couple of years. At an internal company meeting last year, when Alibaba had sent a pitch to Paytm, Ma had said India is a crucial market and Alibaba must have a strategy to be present there.
Paytm has already shared its application programme interface (API) with AliExpress, which is essentially a set of software protocols and tools to build a software. The APIs will allow AliExpress to interact with the Paytm platform and help in listing.
Paytm launched what it calls the Seller App, which is a marketplace for sellers. The products will be listed on the Seller App and the Chinese sellers will directly compete with Indian sellers. AliExpress will also use the Paytm mobile wallet for payments, confirmed company officials. Alibaba has its mobile called Alipay. However, the Alipay wallet is not available in India due to regulatory limitations, which is why sellers will have to use the Paytm wallet.
So far, Indians could buy products from AliExpress, but there were limitations. There was a logistics problem.
Ordered items would take more than a month to get delivered. Paytm and AliExpress have done a tie-up with China Post, the official postal service of China. “The items will be shipped within one week once we go live,” said Paytm officials. The products will be delivered at the buyer’s doorstep by China Post.
The other problem was the pricing. AliExpress, which had its listing in Chinese currency, will offer Indian prices for these 100 million SKUs.
In January, Alibaba had agreed to invest $550 million in Paytm. It has already invested $200 million. The project of listing the seller precedes the investments.
For Paytm, electronics constitute just 5% of total sales. The remaining comes from unstructured products, said Sharma. In Apirl, Paytm did 77 million transactions with an annual run-rate of $1.6 billion. The AliExpress tie-up will help Paytm build on to its portfolio of unstructured products.
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