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Paytm Mall, the e-commerce arm of Paytm, is eyeing an over three-fold jump in gross merchandise value to $10 billion by FY19. Its current GMV run rate stands at $3 billion.
GMV indicates the total value of merchandise sold on a site over a particular time frame and not the total revenue. In March 2017, Paytm spun off the e-commerce business into a separate company.
O2O strategy
According to Amit Sinha, Chief Operating Officer, Paytm Mall, its offline-to-online (O2O) strategy will be the one driving growth. At the core of its strategy are efforts to bring offline stores online and acquire customers.
To that end, the company has tied up with big brands like FBB, Big Bazaar, Samsung, Red Tape and others, apart from smaller ones, which are also popular across tier I and tier III markets. More tie ups are on the cards. This means, Paytm Mall should equip shops with its QR Code enabling them to set up stores online. Customers can scan these QR Codes, browse online stores on the Paytm Mall app and place an order, which will then be delivered by the nearest brand-authorised local retailer.
Sinha explains that thestrategy also comes as an asset-light model. Retailers and shopkeepers become fulfilment points for the company.
“We will look to bring on board more third-party partners. The idea is to have a GMV run rate of $10 billion by FY19,” he told BusinessLine .
Fine tuning the strategy
The target looks ambitious, but not improbable when one sees that online sales are likely to be a $1.1- trillion market (of the total retail in India) by 2020. “We are seeing the benefits of this strategy over the last three to four months,” Sinha said. Naturally, an O2O strategy does not demand e-tailer to have the immediate option of introducing a host of private labels like its competitors.
It is also early days to look at a subscription model.
Popular categories
But, for the company, a bulk of its numbers come from the sale of daily-needs items (that include FMCG products).
Mobiles and laptops — which are of much higher average selling price than daily-need items and household items are amongst the other popular categories.
However, Paytm Mall still has some time before it eyes profitability.
“We are building the technology. A lot of expenses go towards its. Profitability will take some time,” Sinha said.
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