Paytm to invest $2.5billion in e-commerce to take on Flipkart, Amazon
India’s digital payments platform Paytm is gearing up to disrupt the e-commerce market in India as it plans to invest $2.5 billion to take pole position by dethroning Amazon and Flipkart from the top.
Paytm Mall which is the newest entrant in the e-commerce battle has already gained a large market share to close the gap on the likes of Amazon, Flipkart and Snapdeal. The company’s short term ambition is to become the number 3 marketplace in India which it is likely to achieve next year.
However, Paytm is not ready to settle for anything else but the top spot and with the backing of two of the world’s biggest investors in Softbank, Alibaba expects to achieve the unthinkable by 2022.
Top two e-commerce giants in India, Amazon and Flipkart have already taken a massive lead in the e-commerce market with its heavy discounting model leaving others like Paytm to play catch up. The two e-commerce majors are also loaded with funds and expected to invest billions of dollars in the coming years to further expand it base in the country.
Paytm on the other hand is looking to raise the funds of $2.5 billion in the coming months and ready to play the waiting game in order to make efficient use of the funds in its e-commerce entity.
"As e-commerce business, we started six months ago and we are nearly half of the large companies. It has grown so fabulously well that we believe that we have a real good shot in the longer horizon, in 3-5 years, of (reaching) the top spot,” founder Vijay Shekhar Sharma told news agency PTI.
“We will invest 2-2.5 billion dollars and be efficient in utilising the funds. We have actually not started our fund raising process. We have interest from people, and we will probably look at it in next few months and decide the amount of money and who (will be the investors)," he added.
However, according to reports Japanese investor Softbank has already made a commitment to invest in 1932 crore rupees ($300 million) into the e-commerce entity of Paytm. The company is believed to be in talks with some USA investors to raise an additional $300 million and expected to invest at least $1 billion in the coming year.
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