Tencent Holdings has partnered with Indian digital payments firm Patym to invest over $100 million in an Indian content streaming startup called MX Player. The move has been seen as a strategic play in Tencent's efforts to establish itself in India's growing online video streaming market.
According to reports citing sources close to the matter, Tencent and Paytm is apparently now in the final stages of discussion over their specific roles in the planned investment. Both Paytm and Tencent have refused to confirm or deny reports of their planned investment.
Despite not confirming reports of its partnership and planned investment, it would not be at all surprising that Tencent is pouring a lot of its resources in India.
The company, which runs the world's largest video games business, has invested billions of dollars in various countries on content-generating industries such as film and television.
Apart from its highly profitable video games business, Tencent does have plans of expanding its streaming services abroad. Last month, the company had launched its first overseas video streaming service in Thailand.
The company's partnership with Paytm and its reported deal with MX Player have been seen by market analysts as a way for the company to establish its brand in India.
It would only make sense for the company to target India for its expansion given that it is currently the world's second-largest smartphone market.
Both Paytm and Tencent would stand to benefit from MX Player, which reportedly has around 30 million registered active users on its platform. The company's existing users could essentially be tapped by both Tencent and Paytm for added services such as food delivery, online shopping, financial services, and other digital offerings.
Paytm, which is owned by One97 Communications, currently competes with the likes of Netflix and Amazon's Prime video, at least in smaller towns around India. In its previous fiscal year ending in March, Paytm reported around 5.5 billion transactions.
India is also slowly becoming one of the world's biggest consumers of online video content, with hundreds of millions of users logging on the internet every day.
The country's content streaming market is estimated to be worth $1.7 billion by 2023, based on its annual growth rate of around 22 percent per year.
International players such as Netflix and Amazon have already made big moves to establish their brand in India. Both companies have invested billions in an attempt to cash in on India's booming online market.