Paytm Mall, an arm of India’s major fintech startup Paytm, based out of Noida, is, reportedly, closing its warehouses and adopting a hyperlocal model, cited ET. The hyperlocal model will help the company to comply with FDI in e-commerce norms and reduce costs associated with logistics.
The step will also reduce the cost as the company does not need to own and operate its own warehouses. The sellers on its platform will use local courier services for delivery, thereby bringing down the time and cost of deliveries.
“The cost of acquiring sellers has gone down as most of these sellers were already accepting payments using Paytm,” said Rudra Dalmia, VP and CFO of Paytm Mall, said.
Based out of Noida, Paytm was founded in 2010 by Vijay Shekhar Sharma with an aim to bring an ease in the digital payments ecosystem across India.
Whereas, Paytm Mall, is a platform provided by Paytm for user to shop, it works just like any other e-commerce website or application.
“In 2017-18 we were doing a course correction. In this business, one can only be profitable if one becomes a true marketplace and not follow an inventory-based model because the latter comes with the baggage of high costs. Both our partners, eBay and Alibaba are making money,” said Dalmia.
The company, at present, is valued at around $3 billion after eBay agreed to buy a 5.5 per cent stake in it for $165 million.