Jack Ma’s Spicy Recipe for Success

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Jack Ma’s Jack Ma’s Alibaba has desirous eyes on India’s market etailer Paytm, and seeks to increase its current holding in it to 40%. The relationship started fortuitously when it acquired a 25% stake in owner One97 Communications.

Currently $600 million is sitting on the table waiting, with Jack Ma’s expectation being a tasty additional 20% of equity in return. This is poised to create the springboard into India Alibaba has been seeking for a while.

The Draw Card Jack Ma’s Hoping For

This will bump the valuation up of Paytm to $3.7 billion, or 2.7 times what it was after the previous funding round. This follows in the wake of India’s market leader Flipkart raising an extra $1 billion in May 2014, and expecting to cap $16 billion before the close of 2015.

India’s eCommerce Sector Valuations Soaring

Growth like this has been the general trend in India, According to a source close to Jack Ma’s incipient deal, the Chinese magnate intends for Paytm to be his flagship. He believes its large consumer touchpoint is ready to become an ecosystem. By this, he means a biological community of interacting organisms and their physical environment, which becomes a complex network or an interconnected system.

Jack Ma’s Master Plan for Paytm

The wily Chinese master e-businessman has proved his ability to come from behind and beat the opposition. The $600 million he proposes pumping into Paytm could grow the Indian etailer to the point where it threatens the comfort zones of leaders Snapdeal, Flipkart and even Amazon India.

The Achilles Heel of Indian eCommerce

In India, the preferred payment method is cash on delivery COD in 75% of instances, which circumvents the online payment mechanism used in China ecommerce. This becomes impractical when shipping in from overseas. Does Jack Ma have a crystal ball? What is Jack Ma’s strategy for selling Chinese, American and European goods online in India using Paytm as the conduit?

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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