Paytm has its sights set on becoming a significant player in the ecommerce space with its ecommerce unit Paytm Mall. Founder Vijay Shekhar Sharma said that Paytm plans to invest up to $2.5 Bn to grow its nascent online shopping portal business within three to five years as it eyes top spot currently being fought over by Flipkart and Amazon.
Sharma told ET that Paytm’s ecommerce unit Paytm Mall has a “real good shot” at reaching the top spot even though online shopping business, as such, is a long-term bet and certainly “not for the faint hearted”.
“This is a marathon. It is absolutely not about this month’s number versus next,” said Sharma, who sees the ecommerce business as booming, but with long gestation.
“As an ecommerce business, we started six months ago and we are nearly half of the large companies. It has grown so fabulously well that we believe that we have a real good shot in the longer horizon, in 3-5 years, of (reaching) the top spot,” he said.
Sharma added that the process of fund raising would start in January to March quarter of 2018. He also revealed that the company has already seen investor interest coming from various geographies.
“We have actually not started our fundraising process. We have interest from people, and we will probably look at it in next few months and decide the amount of money and who (will be the investors),” he said.
Paytm Mall and Ecommerce In India
In February this year, Paytm had launched Paytm Mall as a new version of its three-year-old ecommerce arm. It offers a combination of the mall and bazaar concepts to Indian consumers. So while Noida-based Paytm started out as a mobile payments and recharge business, over the years the Alibaba-backed company has built its ecommerce marketplace by selling apparel, footwear, smartphones, bus tickets and movie tickets.
Consequently, it has become Alibaba’s biggest bet in the Indian market which entered the country’s ecommerce sector with Paytm Mall in February this year. The Chinese Internet giant currently owns majority stake in Paytm’s ecommerce entity.
No wonder Sharma feels confident enough to take on incumbent market leaders in ecommerce, namely Flipkart and Amazon. While Amazon has committed $5 Bn investment into Amazon India, Flipkart too recently replenished coffers to the tune of $4 Bn thanks to SoftBank, Tencent, eBay and Microsoft.
Sharma asserted that Paytm would be “efficient” in utilising the funds, and though “would not need $5 Bn , we will need couple of billion dollars”. He added that while Paytm’s investment horizons would not go beyond two-three years, the ecommerce business would involve an investment cycle of more than five years.
Paytm has recently been announcing investments in its other businesses too. The company has planned an investment of $500 Mn in KYC (Know Your Customer) operations of its recently inaugurated Paytm Payments Bank. A week prior, the bank had received yet another cash infusion from the parent company. Paytm’s parent company One97 Communications and Sharma together invested $18.84 Mn (INR 122 Cr) in Paytm Payments Bank. This takes their total infusion in the payments bank to $61.78 Mn (INR 400 Cr). While Sharma’s confidence is not unfounded, it will be interesting to see how much of a threat can Paytm Mall be to the current ruling lords of ecommerce in India – Flipkart and Amazon, who are in no mood to concede the race to anyone else at the moment.
[The development was first reported by ET]