After receiving eBay’s backing last month, Paytm now plans to expand its ecommerce marketplace to the Middle East, according to a report by Business Insider. The company will be building a very large business in the region, and is counting on revenue from exports, says Rudra Dalmia, executive director of Paytm.
The company has already started testing the market and the strategies in the region through the partnership with ecommerce giant eBay. The US-based eBay will be helping Paytm to offer its catalogue in the Middle East, in addition Paytm will make eBay’s inventory available to Indian consumers.
Last month, Paytm had raised $150 Mn funding round from eBay for 5.5% stake in Paytm Mall. The funding came with a $10 Mn topup raising the amount to $160 Mn. The money was received from the Singapore arm of the US-based eCommerce giant at the post-money valuation of $2.86 Bn.
Paytm Mall is primarily focused on unbranded and inexpensive products, except electronics. On the contrary, the Middle East has always had a preference for branded and expensive products. It’s still not clear if Paytm would adopt a different strategy to expand to the market or not.
The Middle East has proved to be a profitable market for Chinese cross-border ecommerce websites like Shein and JollyChic. The purchasing power of individuals is much higher than that of the Asian audience due to their high per capita income, making it a strategic market to expand to.
According to PayFort’s report on ‘State of Payments in the Arab World’ released in 2016, the Middle East online payment transactions would grow to $69Bn by 2020. The report tracked the online payment transaction in the airline, travel, ecommerce and entertainment section in seven Arab markets – Egypt, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia and the UAE.