Backed by China giant Alibaba, Paytm to enter eCommerce biz
Mobile payment services firm Paytm on Friday announced its foray into the eCommerce space, putting itself, which is backed by Alibaba, in direct competition with giants like Amazon, Flipkart and Snapdeal. Paytm, in which world's one of the largest e-tailers Alibaba had picked up stake, expects its eCommerce entry to help revenue run rate to more than double to $4 billion (Rs 25,417 crore) by the year-end from $1.5 billion now.
Revenue run rate is a term used in online retailing to indicate total sales value of merchandise sold through the marketplace over a certain time-frame. "We were testing the product and already have 33,000 sellers on board. The sellers can come on board without paying a fee... The payment for products will be through the Paytm platform, which ensures that it is safe and secure for the end-consumer," Paytm founder and CEO Vijay Shekhar Sharma told reporters here.
Asked how the company expects to compete with the giants like Snapdeal and Flipkart, Sharma said the security of the platform, coupled with the variety of choices would help Paytm. "We have 33,000 sellers and we expect this to touch one lakh by year-end. They can list their products in simple steps and customers can also communicate with the seller through chat that is built into the platform," he said.
In February, Alibaba acquired 25 per cent stake in One97 Communications, the parent of mobile commerce firm Paytm. Sharma and SAIF Partners hold about 27 per cent stake each in Paytm.
India, with its expanding Internet users and smartphone penetration, is one of the largest online retail markets in the world and is seeing growing interest from investors globally. According to the consultancy firm PwC, the e-commerce sector in India is expected to grow by 34 per cent to $22 billion in 2015 compared with last year.
Sharma said about 66 million people are already using its wallet services and it expects the number to cross 100 million "much before the year ends." Using Paytm's wallet, users can pay across merchant partners like Uber, Bookmyshow, IRCTC and eBay among others.
The company has also launched a new app for consumers, using which they can transfer money to other Paytm wallet users.