August 30, 2018
This week, published reports indicated that Berkshire Hathaway acquired an investment stake in Indian digital payments provider Paytm that could total up to $350 million. It is the first foray of the firm—owned by renowned investor Warren Buffett—into India. Paytm is a mobile wallet and digital payment network that currently boasts 20 million users. According to observers, the investment amounts to about a 4-percent stake in the company, pushing Paytm’s evaluation to around $10 billion.
E-commerce is expected to grow quickly in India. Research firm eMarketer predicts retail e-commerce in the country to grow 31 percent this year to $32.7 billion. And, as Indian consumers turn increasingly to digital payments—prodded along by government initiatives—Paytm figures to occupy a significant place in the online payment space.
Overall, current e-commerce sales in India pale in comparison to China and the U.S. (the top two e-commerce markets in the world). In fact, both Alipay and WeChat Pay, the two most popular services in China analogous to Paytm, reportedly have 500 million and 900 million users respectively. But, experts believe conditions in India will be ripe for continued growth. In fact, by one measure India will surpass the U.S. for the second spot by 2034.