Chinese e-commerce giant Alibaba announced Thursday it has bought a stake in India's One97 Communications, its first major investment in the country's rapidly growing online business market.
Alibaba's online payment system Alipay has bought a 25 percent stake in One97 with an eye on Paytm, an e-commerce platform owned by the Indian firm that consumers can access through smart phone apps.
The value of the deal hasn't been revealed but local media have pegged it between $200 million and $600 million.
"Paytm will use the funds to grow its mobile payment ecosystem and further boost its commerce user base," a joint statement said.
Alipay will give all "strategic and technical support" to One97 to grow its business which has "vast untapped potential", it added.
"I believe that together, we will change the landscape of mobile payments and commerce in our country," Vijay Shekhar Sharma, founder and chief executive of One97 and Paytm said in the statement.
India's Business Standard newspaper had reported that Alibaba co-founder Peng Lei would join the board of Paytm, but the joint statement Thursday did not confirm the move.
India's online retail industry is currently valued at $2.5 billion and is expected to double every two years until 2020, according to retail consultancy Technopak.