Info-tech

Paytm to replicate Alibaba’s logistics strategy with LogiNext

Priyanka Pani Mumbai | Updated on January 16, 2018 Published on October 26, 2016

Bhushan Patil, President, Paytm

Plans to scale logistics in Tier III and IV towns

Paytm is looking to replicate Chinese e-commerce giant Alibaba’s model in the logistics and supply-chain space in India. To achieve this, the company, which is backed by Alibaba, has tied up with LogiNext, a software-based logistics, route-optimisation and supply-chain management start-up. This will help Paytm tap the remotest parts of the country, where big players such as Blue Dart and DHL are not present. It will also help the firm scale its logistics in Tier III and IV towns, which accounts for over 50 per cent of its orders.

Bhushan Patil, President, Paytm said: “Today, we are a leading player in marketplace business, taking into account the combination of our digital and physical outreach. While we can offer our small merchants business, they would still have to manage the daily operations on their own. Optimising their everyday operations is crucial since it is imperative for us to extend the best customer experience.” Patil joined Paytm in June this year from Alibaba, where he headed the wholesale business.

Alibaba in China has a similar partner in Cainiao, which helps the former expand its services into the thousands of rural villages and remotest part of that country. Alibaba holds about 47 per cent stake in Cainio. The tech-driven logistics firm enables deliveries across China and international markets while tapping into big-data and other technology to increase efficiency.

Possible merger

According to experts, Alibaba wants put in place its strategies and operating style in Paytm as it plans to merge the latter’s marketplace platform with its own eventually.

With LogiNext as its logistics partner, Paytm will be able to not only extend its marketplace services to indigenous merchants in the country, but also help reduce costs and increase sales via daily sales-process automation, real-time tracking and enhanced visibility.

Last year, Paytm had launched an initiative called SEED, under which it has got a little less than 100 mini-warehouses called Seed Centres. LogiNext’s products — Force and Miles — “will help manage these small SEED Centres, and first- and last-mile small courier partners get online and administer their daily activities in a more optimised way.”

Also, with the help of LogiNext, Paytm will be able to collaborate with small and local unorganised courier services and improve their business. It will also work on a few initiatives, such getting KYC requirements done for these smaller sellers, helping them optimise their sales by letting them know about pick-up points and time, and helping them coordinate with sellers and buyers on real-time.

Dhruvil Sanghvi, co-founder and CEO, LogiNext, told BusinessLine that the partnership with Paytm will also help boost the latter’s sales and shipments.

The Mumbai-based company is looking to double its revenues to $4 million this fiscal and triple the shipments to 3 lakh a day. LogiNext also has partnerships with several other e-commerce players and retail chains.

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Published on October 26, 2016
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