Alibaba-backed Paytm to shop for logistics firm next

It helped Paytm generate a billion plus product portfolio

Soon after Chinese e-commerce major Alibaba announces its initial funding, estimated at around $200 million, in the Vijay Shekhar-led Paytm’s online marketplace platform, investment in a logistics firm is expected to follow. Plans for a significant strategic investment in a logistics firm are being finalised by Paytm E-Commerce for smooth deliveries, sources said.

 

“Paytm will either completely buy out a company or get into an exclusive partnership with it. Having an in-house operation is always good. All other e-commerce players own logistics firms,” said a source.

 

The top three e-commerce players in India have in-house logistics firms and tie-ups with players such as Delhivery and India Post. While Flipkart owns Ekart Logistics, Snapdeal has created Vulcan Express and Amazon has ATSPL Amazon Transportation Services.

 

Alibaba Group Holding infused around $200 million into Paytm E-Commerce, making the latter the second Unicorn under the One97 Communications umbrella. An announcement is likely this week. Paytm could get close to $1 bn from Alibaba in 2018, it is learnt.

 

“Acquiring a firm for better logistics makes sense and it would help them monitor operations better,” said an analyst.

 

However, Paytm would go on with its partnership model in warehousing. The firm has 19 warehouse partnerships, and the number is set to increase. It would run fulfillment centres, like Alibaba in China. Paytm’s product portfolio would also be revamped in a few months. It plans to add close to a billion products from across the globe to its shopping cart. Sellers from all over Southeast Asia, including Alibaba’s other investments such as e-commerce major Lazada, would be brought it. “Paytm would play on all of Alibaba’s strength. In two years, the operations would be 10 times that of Paytm’s,” added the source.