Indian digital payments giant Paytm has set up a wholesale entity, for its e-commerce business, to leverage the growing opportunity in the wholesale market, like its e-commerce rivals Amazon and Flipkart.
According to regulatory filings, Paytm Wholesale Commerce was incorporated in September with a share capital of ₹20 crore. The shares have been subscribed to Paytm Ecommerce, the entity which runs Paytm Mall.
The filings further state that the objective of the company is to carry on the business of buying, selling, reselling, importing, exporting of goods and luxury brands on a wholesale and B2B basis.
According to industry members, Paytm’s latest move could be aimed at helping its backer Alibaba bring its products to India. While Paytm Mall is far behind Amazon and Flipkart, which together hold around 80% of the market share for the e-commerce business. This could help Paytm compete with the market leaders.
With the regulatory changes in 2016, limiting sales from a single seller to 25% of the total gross merchandise value (GMV) of the marketplace, e-commerce players in India have been looking towards the wholesale business to boost their incomes.
Earlier this month, it was reported that Amazon Wholesale revenues touched ₹12,000 crore, rising 73% in FY18.
Last month, it was reported that Flipkart India, the Indian e-tailer’s wholesale business, posted ₹21,600 crore in revenues, growing by 40% in FY18.
On the other hand, Paytm continues to grow its e-commerce business. It was reported that Paytm Mall revenues grew over 100 times to reach ₹775 crore in FY18, from merely ₹7.35 crore in FY17.
The latest move by Paytm could further increase competition among India’s leading e-commerce players for the market domination.