Alibaba and Softbank-backed e-commerce platform Paytm Mall is ramping up efforts to focus on grocery and fashion categories, in order to drive sales. Paytm Mall competes with Walmart-owned Flipkart and Amazon India in the online retail segment, which controls more than 80% of the market.
Paytm Mall, which is losing around $200 million every year, is focusing on the online-to-offline (O2O) model, in order to expand its presence. It aims to deliver 50% of orders within 24 hours, from 33% right now.
In September, gross sales for Paytm stood at ₹1,000 crores with around 80 lakh orders. Of these, 3 million orders were generated from the grocery segment, while others were attributed to fashion, home, and electronics.
While the festive season sales are still going on, already Flipkart and Amazon have emerged as market leaders, with 51% and 32% market share respectively, according to research firm RedSeer.
Paytm Mall is looking to target gross sales worth $500 million, during the festive season ending on November 7, according to Vijay Shekhar Sharma, Founder, Paytm Mall. If the digital categories like mobile recharge and travel ticketing, are to be included, the gross sales are expected to touch $1 billion.
While Flipkart and Amazon focus on gross merchandise value, Paytm Mall is looking to become the go-to platform for its customer for daily or weekly requirements.
According to Sharma, the online retailer will not be competing with Flipkart and Amazon across high-value categories like large appliances, laptops, and automobile, where they already have a huge lead, but wants to focus on low-value but recurring expense categories like grocery and fashion.
Paytm Mall is strengthing its offline brands and store partners, who generate 20% of overall offline sales to drive transactions.
In an effort to build the partnership with offline retailers, Paytm Mall announced that it will not charge any commission from mobile, laptop & large retailers, during the festive season sale.
“Retailers and brands both have understood the onslaught of these online retailers who have disintermediated them,” Sharma.
He added, “Who (brands and retailers) let their product get listed, let the demand get generated (for etailers), and then they (etailers) build a private label. Which is actually counter-intuitive for them to list on those platforms. So, we are getting a sort of an advantage position and building a business model of not being an online retailer.”