Paytm to get 1 mn Chinese merchants on its marketplace

Payment will be primary play for Paytm, market place a value add for customers

Mobile commerce firm Paytm, backed by Chinese e-commerce giant Alibaba's financial arm, Ant Financial, is set to get close to one million merchants from China on its marketplace, and add about 100 million stock-keeping units (SKUs) to its platform by July-August.

Paytm, which forayed into the shopping segment a year ago, is also looking to significantly increase the number of local merchants. "As part of the deal with Alibaba, we will get about one million merchants from China and add 100 million SKUs. We will also be increasing the number of Indian merchants from 40,000 at present to 100,000 by the end of this financial year," says Vijay Shekhar Sharma, founder & chief executive of Noida-based One97 Communications, which operates Paytm.

Ant Financial had earlier this year invested $500 million in Paytm for a 25 per cent stake.

RETAIL DREAMS

• 100 mn: The number of stock-keeping units Paytm plans to add
   
• $ 1.6bn: GMV Paytm achieved in a year (aims for $4bn by FY16)
   
• 1 mn: Chinese merchants it will get on its platform by Jul-Aug
   
• 40,000: Local merchants it currently has on its platform (aims to raise it to 100,000)

Sharma is not much worried about competition from the likes of Snapdeal and Flipkart, either in the shopping segment or payments. “We are primarily a mobile payment platform, and marketplace is a value-addition for our customers. In terms of break-up, mobile payments will remain the bigger revenue generator for us,” adds Sharma.

In the commerce segment, Paytm has been scaling fast. It forayed into m-commerce on a marketplace model and has clocked a gross merchandise value (GMV) of $1.6 billion.

It is aiming to increase its GMV to $4 billion by the end of this year. "Unlike other companies, we do not have affiliate firms taking care of delivery. We are in the truest sense a marketplace service provider; we only manage orders for merchants, and delivery of products is done by the merchants themselves. No merchant on our platform gets more than five per cent of orders," says Sharma.

Around 10,000 merchants sold and delivered items through Paytm in just one month, claims the company. It says 95 per cent of its orders have been in unstructured categories like fashion, home furnishing and accessories, which have accounted for 60 per cent of its GMV. Paytm gets seven-eight per cent of margins on every order that gets completed, in addition to 2-2.5 per cent margins from the payment platform.

Sharma agrees that Paytm's strategy of growth in India has been similar to that of Alibaba'a Alipay in China, and it now resembles that of TaoBao. Asked how much of the shift to m-commerce has come because of Jack Ma, whose company invested $500 million in Paytm, Sharma says not much. "When they saw our business, they found it similar to theirs. The move to add shopping to the platform was our own idea."

Though the company is scaling up its mobile commerce platform, Sharma is equally serious about getting a banking licence, for which his company has applied. "Payment will be our primary play. We came into business to solve the payment issues of this country and I am confident that we can solve those by using the mobile platform. RBI is expected to come out with the first list on August 1. If we get a licence, we can offer a bouquet of financial services," he adds.

At present, Paytm has a user base of 80 million - 30 million for its mobile wallet service. The number includes users accessing its services through computers. Sharma expects to see 50 million Paytm app downloads and a wallet user base of 200 million by the end of 2015-16.