Paytm Mall aiming $10 billion in gross sales by March 2019

Tinuku - Alibaba Group-backed Paytm Mall is aiming for a nearly threefold rise in annualized gross sales to US$10 billion by March 2019. Founder and chief executive Vijay Shekhar Sharma said by March, Paytm expects unit orders to jump to 1-1.5 million per month, from about 625,000 currently.

Paytm E-Commerce Pvt. Ltd, which runs the online marketplace, achieved UD$3.5 billion in annualized gross sales in June. The robust performance had made Paytm Mall a strong No. 3 in the local e-commerce market within a year of its launch. Gross sales or gross merchandise value refers to the value of goods sold on a marketplace before product returns.

Tinuku Paytm Mall aiming $10 billion in gross sales by March 2019

The company, which trails Flipkart and Amazon in India, has raised about US$650 million since its inception in April 2017. During its latest fundraise of about US$450 million from Softbank Group, it was valued at about US$2 billion.

In the latest Independence Day sale, Paytm claims to have processed more than two million orders in the last four days led by mobiles, groceries, fashion, electronics and appliances. Just like other top online retailers, sales are driven by heavy discounts or in Paytm’s case, cashbacks.

The company claims to spend about US$20 million each quarter on marketing, which includes cash backs to draw customers to its platform. For Paytm Mall, the largest categories by value include appliances, laptops and mobiles. However, the daily needs category generates the maximum number of orders.

Sharma said the company plans to expand its fashion and home business this year. Paytm Mall, which is betting on Alibaba’s marketplace model to be successful in India, plans to create differentiation in the market by not creating any private labels or having an inventory-led business model. It is also bullish on the O2O (offline to online) model in India.

Paytm currently offers same-day delivery and O2O deliveries in the top 15 cities including New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad. It plans to expand these services to 25 cities including Kota, Jabalpur, Dehradun and Indore, among others by Diwali.

Paytm Mall’s O2O operating model is trying to leverage India’s 15 million offline retail shops to participate in India’s e-commerce boom. The company currently works with offline stores in partnership with brands such as Samsung, LG, Lenovo, Intel, Red Tape, Canon, HP, Godrej and Hitachi.

India’s largest e-commerce companies Flipkart and Amazon India already have a strong line-up of private labels and further plan to expand their offerings this year. While the two claim to be a marketplace, their sales are largely driven by a handful of large sellers. The top two players are also reaping the benefits of a growing preference for online shopping among Indians.

In May, Walmart said Flipkart Group recorded gross merchandise value of US$7.5 billion for the year ended 31 March, a growth of 50%. Net sales stood at US$4.6 billion in the last financial year. Until now, the marketplace model has struggled to create a successful e-commerce company in India. Snapdeal, ShopClues and eBay India are some prominent examples of struggling online retailers.

Snapdeal, once the third-largest e-commerce company in the country, survived a near death scenario in 2017 when it struggled to raise funds and was close to getting sold to rival Flipkart. Gurgaon-based ShopClues too has been struggling to attract a large cheque and was surviving on a bridge funding from existing investors. To stay afloat and fight competition in the upcoming festive season, ShopClues would need to raise more money.