Paytm founder Vijay Shekhar Sharma has denied that the company is planning to exit the online marketplace business but said its newly-launched online wholesale business is expected to generate about 15% of the Paytm Mall’s business in the coming years.
Three people close to the Noida-based mobile payments and e-commerce firm, however, said Paytm is looking to exit, or at least scale down, its marketplace business due to intense competition from larger rivals of Flipkart and Amazon.
Instead, the company would focus on business-to-business (B2B), two of them said.
“They have figured out that they are not acquiring loyal customers in the B2C space,” one of the persons told ET. “Now they will completely focus on the B2B space.”
Another person said a host of Paytm Mall employees have been given the option of shifting to other verticals within the payment services company.
Sharma, however, said “there is no truth” in these claims about the proposed closure of Paytm B2C business and movement of staff from its e-commerce marketplace.
“We did add wholesale category to Paytm payment merchants’ app as a new offering from Mall” earlier this month, he said. “Wholesale is an add-on business and budgeted to contribute about 10-15% of total Mall gross merchandise value (GMV) in coming year.”
Sharma said the marketplace is doing well and the platform is expected to grow 50% to double the GMV to $2 billion by fiscal year ending March 2019. “There is a huge opportunity in B2C business and there is an overall favourable environment for consumer businesses,” he said.
Sharma said his company did ask certain sellers of some categories to list their products on the wholesale site as well. “But that doesn’t mean we are pivoting from B2C,” he said in a telephonic interview on Thursday. “We are trying to monetize the small sellers that use our digital and financial services products.”
Once a small Noida directory services company, Paytm is currently one of the largest digital success stories out of India. Its investors include China’s e-commerce titan Alibaba, American ace investor Warren Buffett and Japanese investment behemoth Softbank.
Paytm was reportedly valued at about $10 billion when 3-4% stake in parent firm One97 Communications was sold for about $300 million in August.
Sharma said Paytm Mall is a pure marketplace and doesn’t hold any inventory or have stakes in its sellers, and is compliant with India’s latest FDI regulations in e-commerce.
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