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Paytm is one of the fastest growing Indian e-commerce shopping website. But
this is not the Paytm was exactly when it was founded in 2010. Paytm was
founded as prepaid mobile recharge website. But now the business has diversify
themselves to many other sectors like utility bill payment, wallet payment, wallet to
wallet and wallet to bank transfers for many leading internet based companies in
India, shopping, discount coupons etc.
Company Profile
Noida-based mobile commerce platform was incubated by One97 Communications.
The idea was actually implemented by Vijay Shekhar Sharma. The app
downloaded on various platforms has touched the mark of 7 million. They have
over 20 million registered users and 26 million transacting users who pay
online. The additional features added like Bargain power which is not currently
available at any other marketplace and unified dashboard has made the selling and
buying more interesting for users. They do 400,000 orders per day, which is second
highest in the country after IRCTC. At present, the company is doing $1 billion Gross
Merchandise Value (GMV) with only 15% customers choosing Cash on Delivery
(COD) option. Paytm is also available across many popular mobile apps (like Uber,
Bookmyshow, Homeshop18 MakeMyTrip, Naaptol and FoodPanda) as preferred
payment method.
Different Business
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Diversification from Prepaid Mobile Recharge Business to E-Commerce
Every Indian loves to bargain, and no Indian can resist when they get their trusted
mobile recharge app as a platform to let them buy things on bargain. Yes, Paytm
offers bargains to shoppers purchasing clothing, shoes, accessories and other
goods. In February 2014, they launched its mobile based marketplace and now
recently has launched a seller dedicated app with zero commission model.
Their website and mobile app has been transformed into a full-fledged e-commerce
marketplace offering categories from electronics, mobile phones, sports & health,
home & kitchen, books, baby & toys and many more categories. Their vision for
setting up the ecommerce business is to remove the middlemen and allow SMEs
(Small & Medium Enterprises) to sell their produce directly to consumers through
the online platform. These SME even includes boutique producers and small
manufacturer. They have about 40 million registered SMEs in India. They are
trying to anchor their platform on key utility monthly needs of the consumer like
energy, transport & communication. 15,000 merchants are actively registered
with Paytm.
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Business Model for their E-commerce
According to the founder of Paytm, Vijay Shekar Sharma, they are different than any
other marketplace out in the market. They provide 3 extra tools for the Indian
Merchants to help them to grow. The 3 tools are talking to the merchants,
catalogue management- giving those insights about consumers, analytics and
feedback on their storefront and lastly marketing- where merchants can become
part of Paytm promotions. Apart from it Paytm doesnt provides the logistics service
to their merchants. But they solve the merchants problem of by giving them
customers in their vicinity. And even if they are selling in the remote areas, they
already have their logistics cloud with data of multiple logistics companies in it.
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this move is like what Alibaba Groups Taobao works on. Taobao is an online
marketplace in China operated by the Alibaba Group that started working on zero
commission concepts.
Wallet app
Paytm has also launched a wallet app which allows users to transfer money
between them. This wallet essentially lets you store cash digitally, which can then
be used for mobile and online transactions. The company further revealed that it
now had more than 12 million users making use of the Paytm Wallet service.
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aggregating courier companies to ensure deliveries countrywide, customer
acquisition and marketing activities.
The merchant model varies, though. While some pay for listing their coupons,
others pay for distributing those and so on. Interestingly, merchants account for the
largest share of the companys revenues (50 per cent), followed by customer fee for
coupons (30 per cent) while recharge commissions come last (20 per cent). This is
understandable as the margins in the recharge business happen to be low. In fact, it
lies in the range of 0.5-1 per cent.
International Expansion
In Dec 2014, the mobile commerce platform has has announced its plans to foray
into international markets of Singapore & other South-east Asian States. The
company says that they choose South East Asian markets like Indonesia, Thailand
and Malaysia, as they see great opportunity for payments on-the-go via the Paytm
Mobile App in this region. Paytm intends to bring, to these markets, their app driven
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convenience of paying for utility bills in the first phase, and will cater primarily to
areas such as bill payments, transportation, parking, metros etc. The company aims
to reach up to two million customers in the first year of operations.
Paytm has yet to turn in a profit but Sharma says he is not chasing profitability yet.
Erik Jing of Alipay, the Alibaba Group Company said, We dont care about
profitability, we care about SMEs, users on the Paytm wallet. Alipay was keen on
expanding financial inclusion in India through Paytm.
Their target this year is to bring 1,00,000 merchants on their platform. Over the
next six months, the firm is also considering at 25,000+ tickets per day using Paytm
wallet on IRCTC platform. According to a report, Paytm claims to earn revenues of
over $500 million now but Sharma says this will jump to $2 billion by December
2015. Half of Paytms run rate will then come from the m-commerce marketplace
push.
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Ref:
http://dsim.in/blog/case-study-paytm-journey-from-mobile-recharge-to-e-commerce-
market/
http://www.mobilepaymentstoday.com/news/paytm-expands-mobile-wallet-
capabilities-in-india/
http://www.bgr.in/news/paytm-wants-to-go-global-looks-to-enter-singapore-and-
south-east-asian-markets/
http://www.medianama.com/2015/03/223-most-of-the-marketplaces-in-this-country-
have-a-dormant-merchant-base-vijay-shekhar-sharma/\
http://articles.economictimes.indiatimes.com/2015-02-06/news/58878976_1_paytm-
alibaba-25-stake
http://yourstory.com/2015/03/paytm-funding-ratan-tata/
http://indianbizparty.com/news/paytm-announces-zero-commission-mobile-app-
marketplace-for-smes
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