Ant Financial Services Group has just announced its first investment in an Indian company by picking up 25% stake in One97. Ant Financial includes Alipay, the payment platform of Chinese e-commerce giant Alibaba, which was spun off in 2004.
Though an Ant Financial spokesperson says in this exclusive chat with Firstpost that the company has no plans as of now to invest in more Indian firms and that this investment is not related to the Alibaba Group, this has not stopped other Indian e-commerce and e-payments players from gushing over the deal.
This deal is being seen as Alibaba's entry into India, with One97's Vijay Shekhar Sharma telling us earlier that Jack Ma was completely involved in discussions leading up to this transaction.
Excerpts from the conversation:
Ant Financial Services Group is a leader in China’s online payment and financial services. Tell us a bit about how it started, when it started and what kind of businesses it has financed.
Alipay started in 2004 as the payment platform for Alibaba Group’s marketplaces. Over the years, Alipay has evolved into a multi-purpose payment service and an indispensable part of people’s daily lives in China, which supports utility payment, movie tickets, supermarket, and credit card repayment etc. In 2011, Alipay was spun off from Alibaba Group to obtain a payment license as the regulations provided specific guidelines for license applications only for domestic PRC-owned entities. After the spin-off, Alipay falls under Zhejiang Ant Small and Micro Financial Services Group, which we branded as Ant Financial Services Group. The services of Ant Financial have expanded to a much wider scope and is focused on serving small and micro enterprises as well as consumers. The businesses units under Ant Financial include Alipay, the largest online payment service provider in China; Alipay Wallet, the mobile application; Yu’e Bao, a money market fund service jointly provided by Alipay and Tianhong Asset Management; Ant Micro Loan, a micro online loan provider serving small businesses and individual entrepreneurs; Sesame Credit, the first credit agency in China to use a scoring system based on online and offline data to generate individual credit scores for consumers and small business owners; and so on.
Is the 25% stake acquisition in One97 the first step and will Ant increase its exposure in the Indian market going forward? Will Ant invest more in One97 beyond this initial investment?
This is Ant Financial’s first investment into an Indian company. Our priority is to collaborate with Paytm closely to help build a prosperous payment ecosystem over the long run.
Why only One97 or is Ant evaluating similar investments in other payments solutions companies in India? How many companies in other countries has Ant made similar investments in? And what is its exposure to the payments business outside China?
We do not have a plan to invest in any other Indian company currently. Alipay’s overseas efforts have been focused on cross-border payment, which means to help Chinese consumers buy directly from overseas merchants and help overseas buyers purchase directly from Chinese sellers. For example, Alipay has joined hands with Lotte.com from South Korea, Neiman Marcus and Gilt from the US etc. It has also partnered with payment service providers in different markets to make it easy for overseas online shoppers to shop on several marketplaces of Alibaba Group.
There is some excitement in India because Ant's investment is seen as the first investment by Alibaba group in India. Is this perception correct? How long did you take to evaluate One97 before making a decision to invest in the company? How much of this decision was guided by Mr Jack Ma's interest in the growing Indian e-commerce market?
We are not disclosing the details of this transaction. The investment is undertaken by Ant Financial Services Group, which is not related to Alibaba Group.
What is the kind of return you expect on this investment in One97, given the rapid pace of growth of the Indian mobile payments and e-commerce market?
We are focused on helping Paytm become a stronger player in the mobile payment market in India by leveraging our technology support and payment expertise.
Updated Date: Feb 06, 2015 17:50 PM