Paytm Mall Undergoes Company Restructuring Post The Hyperlocal Pivot

Following the recent hyperlocal pivot and a strategic partnership with eBay, ecommerce company Paytm Mall has reportedly excluded itself from Paytm’s core fintech business. 

Chief financial officer of Paytm Mall, Rudra Dalma has reportedly said, “The Paytm’s ecommerce arm has seen significant restructuring, including no common team member across its two businesses.”

Paytm Mall is also said to have completely integrated with deals platform Nearbuy, which Paytm has acquired in 2017. This integration is expected to result in revenue boost through services such as advertising, point of sale (PoS) and marketing. 

Further, the ecommerce entity has reportedly partnered with Kishore Biyani’s Future Group, Reliance Industries and BigBasket for support its offline-to-online business.

Last month, US-based ecommerce company eBay has announced a strategic partnership with Paytm Mall along with acquiring a 5.5% stake in the Indian ecommerce marketplace.

Following which, the company was reported to be shutting down its warehouses and adopting a hyperlocal model. At that time, the company said this is expected to help the company reduced costs associated with logistics. This will also bring down the company’s costs drastically as it would not need to own and operate its own warehouses.

Rudra Dalmia, VP and CFO of Paytm Mall said that the sellers on its platform will now use local courier services for delivery, thereby bringing down the time and cost of deliveries. He also said that the cost of acquiring sellers has gone down as most of these sellers were already accepting payments using Paytm. 

Paytm Mall is in the midst of tight competition with Reliance Jio’s imminent entry in this space, and the expansion of ecommerce giants Amazon and Flipkart in the offline-to-online hybrid commerce sector.

In a media statement, Paytm Mall said it is now aiming to be EBITDA-positive within two years. In the current financial year, Paytm Mall is eyeing a GMV of INR 17,000 Cr. Paytm Mall had decided to narrow its focus to a wholesale platform with offline-to-online hybrid commerce becoming the core business, instead of a consumer facing ecommerce site.

The company expects to generate a bulk of its sales from O2O, 15% from wholesale and 35% from warehouse items. Paytm Mall expects to hit $2 Bn in gross merchandise sales this year, according to Vijay Shekhar Sharma. Further, the company is also hiring 600 people to expand its O2O footprint.

The new O2O revenue line is built on a tech platform focussed around AI-led technology solutions to bring in incremental sales for offline retailers through Paytm Mall. Dalmia was expected to expand this division and strengthen the management team with new hires.

According to Google India Research, India is expected to generate $100 Bn in online retail revenue by 2021.

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