![](https://img.etimg.com/thumb/msid-59998998,width-300,height-225,imgsize-53532,resizemode-75/.jpg)
Launch date: February 2017
Founding team: Vijay Shekhar Sharma
Location: Noida
Funding Raised in 2017: $200 million
Overall Funding Raised Since Starting Up: $200 million
Strength of the company: NA
Industry it operates in: Online retail
The last decade that ecommerce in India has been in existence, it has grappled with two major cash burns -- logistics and warehousing. While leaders like Flipkart and Amazon have initiated measures to cut down on the two most draining aspects of online retail in their respective march towards profitability, there is a new player in town who is changing the rules.
Launched in February 2017, Paytm Mall is focussed on keeping its cash reserved for expansion by gravitating increasingly towards the online to offline (O2O) model. The model is expected to save the new company the hassle and the cost of the fulfilling orders by laying that responsibility on the retailers and the brands directly. Not that the company is short on cash - Paytm Mall raised a whopping $200 million from Alibaba Group and SAIF Partners in March this year.
While it is Paytm Mall that introduced the concept in India, China-based Taobao Mall has been functioning on similar principles.
Paytm Mall's O2O model is already live in over 30 cities and the management is working towards making it a substantial portion of its online commerce business.
"I believe in the long term this will be about how we helped Indian retailers win against large monolithic online retailers," the CEO at Paytm Mall, Amit Sinha, told the Economic Times in a recent story.
Unlike Flipkart (Ekart) and Amazon India (Amazon Transport Services), Paytm Mall does not have its own logistics division or fulfilment centres and is giving all the indications of not even moving in this direction.
While the model takes away the control on the delivery and the quality of the value chain, it will help the platform to help escape the money gobbling loop of storing and delivering products.
Also Read: The full list of India's top funded Startups in 2017
Controlled cost but quality-focussed
It is apparent that Paytm Mall wants to avoid the regular pitfalls of ecommerce, but its recent actions also ensure that profits come at the cost of quality. Just before launching its O2O platform, the company had delisted 85,000 sellers from its platform.
"From now on, merchants who want to sell their products through Paytm Mall will have to furnish brand authorisation letters, besides running strict quality and service audits. They will also have to submit their registration number, shop location and photos, and goods and services tax identification number in order to list their products on the platform," Paytm had said in a statement released at the time.
A couple of weeks later Paytm Ecommerce, the parent company of Paytm Mall, conducted an audit in July which led to the company delisting six of its 14 logistics partners and 10 courier aggregation services. The drastic move limited the months old company's delivery abilities to 17,000 pin codes, down from 26,000 it serviced earlier.
The reasons provided were the inability of the vendors to meet service standards and customer experience and Sinha stated that the move was to ensure a "superior customer experience" over "rapid expansion".
While not spending on building its own support infrastructure, Paytm Mall has announced its initiative to enable the multiple merchants on its platform to set up their own fulfilment abilities. One of its initiatives is to help vendors set up QR codes which will enable the customers to get access to the stores' inventory on Paytm Mall. Like QR stickers in physical stores enable a customer to pay digitally through Paytm, the customers will be able to scan the code using their smartphones to shop at the store of their choosing.
Grocery - the next battleground
While fashion, consumer electronics, and fast moving consumer goods are the top selling categories on any ecommerce platform, Flipkart has clearly stolen the march on every etailer in the country by bringing Myntra and Jabong under its umbrella.
The battle now seems to be intensifying in the grocery segment. Grocery and food segment currently commands a sizeable portion ($275 billion) of the $630 billion retail in the country. The category will be highly contested because of its potential to drive repeat purchase. Amazon has already made its play after getting the government's approval to invest $500 million under foreign direct investment in the business which will enable it to sell directly to the consumers. Flipkart has also gone public with its intention of entering the segment soon.
Paytm Mall it seems is not likely to be left behind as recent reports suggest its interest in putting $200 million in the Benagluru-based BigBasket for picking a significant minority stake. The reports, although, have not been confirmed by either of the two parties. If the deal comes through it will give Paytm Mall more than a foot in an increasingly important category.
(Catch all the Business News, Breaking News, Union Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
Read More News on
(Catch all the Business News, Breaking News, Union Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.