Paytm has become one of the most popular e wallets among Indians since last year’s Modi’s government demonetization drive. Now this payment giant has entered into a joint venture with Alibaba group of companies to set up online mobile games and other various entertainment products. The two online companies will help promote mobile payment throughout India.
In a recent move by Hong Kong-based AGTech Holdings it was made clear that the future projects of the two companies will be focused on improving the lifestyle of people. The announcement of the partnership between these two powerful Asian companies will undoubtedly prove to be beneficial to the overall state of the online market and the integration of its service in people’s lives on a daily basis. The teaming up involves the investment of $7.2 million made by AGTech and $8.8 million (Rs 56 crore) by Paytm, which equals a 55 percent stake for the Indian company.
Paytm boasts 255 million users in India’s electronics-payments business, but the company could always use a significant boost from a foreign company. AGTech Holdings is dedicating its time to developing gambling and lottery systems, and despite that, the company has decided to focus on developing games partnering with the Indian group. The reason behind this is because mobile apps which provide in-app purchases are the gateway to mobile payment because it makes customers feel more confident in the security of the money transaction.
According to the deal, the joint venture entity would have a five-member board of directors, of which three shall be nominated by Paytm Group and two by AGTech Media. According to the filing, Paytm Holding is principally engaged in the business of providing digital goods and services, and electronic payment solutions.
AGTech’s majority owners are Alibaba Group Holding Ltd. and Ant Financial. Due to its struggle to make a significant profit, the company aims to diversify its products and provide its customers with a wider variety of options. In 2016 the majority owners Alibaba Group purchased another unit in the gaming industry. Major gambling operator Caesars Entertainment Corp. signed the estimated to $4.4 billion deal to sell Playtika Ltd. to the consortium Shanghai Giant Network Technology Co. which includes Yunfeng Capital.
This is a private equity company founded by Jack Ma, Chairman of Alibaba Group. This deal surged Caesars Entertainment with as much as 11 percent and helped it to breathe easily, after the tough time it has been experiencing following the filing for bankruptcy of its largest division in the beginning of 2015. Playtika stands out in the crowd because its virtual currency could not be exchanged for real money, and this way of working remained under the new ownership.
The decision to purchase the casino-style gaming platform came in accordance with the ever-changing and developing world of mobile applications and gaming. Playtika gave the consortium the opportunity to take their share of the field and attract the demanding customers of it. Their habits are changing and there is a visible transition from PC and console-based systems to mobile apps.
Ant Financial Group holds a little more than 30 per cent shareholding in Paytm Holding. AGTech Media is a private company incorporated in Hong Kong, with limited liability, and is a wholly-owned subsidiary of the Group. The Group is an integrated technology and services provider, principally engaged in the lottery and mobile game and entertainment sector.
Alibaba’s interest in the Indian online gaming market isn’t misplaced considering a recent Google-KPMG report revealed that the market is inching towards reaching $1 billion by the year 2021.
According to the Google-KPMG report, there has been a whopping 117 percent increase in searches for online games in India, mostly coming from the 16-45 age group. Asia currently makes up for more than a 60 per cent share of the global gaming revenue in 2016. Though most of this is currently coming from China and Japan, India with its 300 million players isn’t far behind in the game.
Paytm claims that ut can bring half a billion Indians on its platform by the year 2020. For Alibaba, the joint venture will be its second outing in online gaming space in India. In 2016, the company launched launched a $20 million fund for online gaming startups in the country. Alibaba’s accelerator ’9 Apps Dev’ helps developers build, monetize and publicize their products.