One97 Communications, the parent company of digital payment platform Paytm, has (finally!) incorporated another entity named Paytm E-Commerce Pvt. Ltd. As the name itself suggests, the newly registered company is for its online retail business. A step in this direction was long due.
According to various reports, One97, the parent company behind Paytm is now looking to spin-off is e-commerce business, ahead of its key investor Alibaba’s entry in the Indian e-commerce space. The company has already registered the new entity and will soon transfer its retail business to the same.
Once the process is completed, the e-commerce entity will be able to independently raise money from investors. According to the people aware of the matter, the company has already started talks with existing investors to infuse fresh capital in the new entity.
According to the documents from Registrar of Companies, the new entity was incorporated on 16th August, sharing a common address with One97’s Delhi office. It currently lists One97 founder Vijay Shekhar Sharma as the majority shareholder in the firm. It is said that shareholding structure of this newly formed e-commerce entity will be similar to that of its parent company.
China’s Alibaba Group, holds around 41% stake in One97 Communications, together with its payments arm Alipay and Ant Services. Notably, it also holds a minority stake in Snapdeal. The Chinese e-commerce giant has aggressive plans to build a presence in the Indian market and has reportedly started to build its team in India.
According to recent reports, Alibaba is currently scouting for partners to make a strong entry in the Indian e-commerce market. The company’s recently said to be in talks to acquire ShopClues.com. Its strategy is to create a strong entity which can compete against the likes of Amazon India from the very beginning.
Paytm, which is leading in the digital wallet market, aggressively built its e-commerce business in recent years. Apart from this separate e-commerce entity, the company is also spinning off its payment business into separate entity. Paytm Payments Bank Ltd. will be a subsidiary of One97, with Vijay Sharma holding 51% stake. It is set to launch by end of October.