Paytm forays into e-commerce; to compete with likes of Flipkart

NEW DELHI: Mobile payment services provider Paytm has launched two applications, a wallet app that allows users to transfer money between them and a platform for small and medium-scale enterprises as well as individuals to display their products. It won’t charge any commission for the listing.

The company in which Alibaba’s finance arm Ant Financial holds a 25% stake, intends to become India’s version of Tao Bao, China’s largest marketplace operated by the Alibaba Group. For now, it is aiming to cross $4 billion (Rs 25,360 crore) in total revenue run rate by the end of 2015, with half of that expected to come from its marketplace.

“Everyone is moving to mobile now, but that is what we started with,” said Vijay Shekhar Sharma, founder and chief executive of Paytm’s owner, One97 Communications. “We see opportunity in enabling payments in everyday use cases.”

Paytm’s new investors will help it strengthen its presence in India. Ant Financial’s chief operating officer, Eric Jing, said it is sharing its industry and technical learnings from China with the Indian mobile commerce provider. The company competes with Flipkart, Snapdeal and Amazon in the marketplace arena.

India has more than 243 million people using the Internet and most of them access it through smartphones, which have become affordable over the past couple of years. Despite being nascent, India’s booming ecommerce market is swiftly going mobile. Some online players like Myntra and Flipkart are planning to be present solely via apps.

Paytm, which started off as a mobile recharge provider, added deals, wallet and marketplace on its app over the past year. It has also tied up with Uber Technologies to become the cab-hailing service’s default mobile payment system and applied for a payments bank license.

The company, which is yet to turn profitable, is spending more than Rs 500 crore on marketing this year. The Paytm Wallet app, which has over 100,000 downloads on Google Play, allows money transfers within Paytm wallets and consumers can also transfer money in the wallet to a bank account, for cashing out.

A user can make monthly transactions of up to Rs 1 lakh, subject to banking-related authentication conditions. “We have about 66 million wallets, which we want to take to 100 million by the year end,” Sharma said. “We’re doing 1 million money transfers a day on the beta version of the wallet app.”

Its seller app will allow small and medium-scale companies, or even individual entrepreneurs, to display their catalogue on Paytm, and manage their inventory and orders on the fly. Paytm will not charge any commission from these merchants. Other marketplaces usually take a 10-15% commission. Paytm expects that the number of sellers or merchants on board will rise to 100,000 by the end of the year from about 33,000 at present.