Alibaba Kickstarts India Leg With Paytm Mall

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Alibaba-backed Paytm has launched Paytm Mall, a consumer shopping app, to take on local rival Flipkart and global rival Amazon in the country.

#DigitalErra Thought Corner

The Paytm Mall, an Android app for smart-phones is modeled on TMall, China’s dominant e-commerce platform. The launch of the app comes close on the heels of talks where Paytm E-Commerce seeks to raise $180-200 million in an investment round led by Alibaba Group Holding Ltd. that will value the online retailer at about $1 billion. Post the funding round, the combined shareholding of Alibaba and its affiliate Ant Financials is expected to be over 50% in Paytm E-commerce.

About Paytm Mall

Paytm Mall will offer a unique combination of the mall and bazaar concepts to Indian consumers. According to a Paytm statement, Paytm Mall will allow customers to shop from 68 million products across categories such as fashion, electronics, consumer durables and home furnishings, from about 140,000 sellers.

Paytm will manage its deliveries through 17 fulfilment centres of third-party warehouse providers and those owned by sellers leveraging the network of its 40 courier partners. Only trusted sellers passing strict quality guidelines and qualification criteria will be allowed. Products listed on the mall will also go through Paytm certified warehouse and shipping channels ensuring guaranteed consumer trust. The Bazaar, the unstructured shopping channel on Paytm, will also be featured on a new app. It will aim at providing consumers the widest domestic and international assortment.

Speaking at the launch, Saurabh Vashishtha Vice-President Paytm said, “Through PaytmMall, our aim is to offer consumers the most trusted shopping experience. We have defined quality criteria for sellers and are building strict controls over warehousing and shipping for products sold on PaytmMall. Consumers would continue to get the largest assortment of domestic and international products through Paytm Bazaar, which will also be featured on the new app.”

Competition to Amazon

To take on Amazon, Paytm e-commerce plans to add close to a billion products from all across the globe to its shopping cart. It would include bringing sellers from Southeast Asia especially from Alibaba’s other investments such as e-commerce major Lazada which has huge base in Indonesia. It would look at offering around a billion products by the festive season that kicks off in August. On an average according to market sources, Amazon has around 500 million products on its platform, while Flipkart and Snapdeal have around 50 million products.

“Paytm would play on Alibaba’s strength. For products the company would bring in sellers from Lazada, sellers from other countries as the Chinese major’s ties in US and Europe. The operations would be 10 times of what Paytm’s operations are right now in the next two years,” a person familiar with the development said.

A New Angle To India’s eCommerce Story

Until these, the eCommerce sector in India was unarguably a two-pronged race between Flipkart and Amazon. Paytm Mall marks the formal entry of Alibaba and with these, the jostle for market share is going to heat up further. Alike Amazon, Alibaba has years of expertise to successfully carry out the different dimensions of running eCommerce.

In 2016, India’s e-commerce industry saw businesses such as Askme collapse; firms such as Flipkart and Snapdeal shed jobs, cut expenses and look at profitability than vanity metrics. The Indian firms also struggled to raise funds to fend off competition from Amazon. As a result, the industry growth fell by 15 times to 12 per cent at $14.5 billion in 2016.

The launch marks a new chapter for Paytm and infuses a fresh breath of air in the eCommerce ecosystem.

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