Reports that Alibaba may ink a deal to link two of the world's fastest-growing e-commerce markets, India and China, is a shot in the arm for the firm's global expansion plans, analysts say.
Media outlets reported this week that Alibaba is in discussions with Indian internet firm One97 Communications to invest $575 million in its e-payment service Paytm, which has 25 million registered users and boasts high-profile clients including Uber, Expedia and Airbnb.
The deal would allow Indian customers to use Paytm to pay for goods on Alibaba sites, while Chinese users could use Alipay on Paytm's marketplace. Merchants on both platforms would also be able to list their products on each other's marketplaces.
"If the news were to prove true, we believe such an investment could mark another important step in Alibaba's global expansion strategy," analysts at Barclays said in a note on Tuesday, referring to expanded market opportunities for Chinese sellers. It also allows Alibaba to penetrate India's booming e-commerce market, which is expected to reach $30 billion by 2020, versus $17 billion in 2014, according to Barclays.