Paytm Mall cuts FY19 losses by 34.46%

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Published: November 1, 2019 4:28:33 AM

Last year, Paytm Mall had said it planned to spend $30 million over the year on establishing Point of sale solutions across 1,00,000 retail stores.

paytm, e commerceAnalysts said Paytm will be able to leverage investor Alibaba’s expertise in building the O2O model. Alibaba has a similar model as part of their new retail roll-out in China.

Paytm E-commerce’s net losses narrowed by 34.46% to `1,171.44 crore in the year to March 2019 compared to the year-ago period, according to the company’s RoC filings sourced from business intelligence platform Tofler. Total expenses of the firm stood at Rs 2,139.6 crore in FY19, a marginal decline from expenses of `2,581.38 crore reported in FY18. Revenue from operations increased by 19.97% year-on-year to Rs 892.77 crore in FY19, the data showed.

Unable to compete with deep-pocketed Flipkart and Amazon that jointly command close to 80% of the domestic e-commerce market, Paytm Mall (the e-commerce entity) pivoted its business on the O2O (online to offline) model, shifting from the earlier cashback-led strategy. Doling out discounts and cashbacks led to huge cash burn for the firm. Losses ballooned to `1,787.55 crore in FY18 compared to losses of Rs 13.63 crore posted in FY17.

Last year, Paytm Mall had said it planned to spend $30 million over the year on establishing Point of sale solutions across 1,00,000 retail stores.

Analysts said Paytm will be able to leverage investor Alibaba’s expertise in building the O2O model. Alibaba has a similar model as part of their new retail roll-out in China.

In July, US-based eBay invested $160 million in Paytm Mall, acquiring a 5.5% stake in the company. The partnership will give users access to eBay’s global inventory.

Paytm’s parent firm posted losses of close to Rs 4,000 crore in FY19 against over Rs 1,000 crore in the year-ago period.

Earlier this week, the marketplace entity of Flipkart reported losses of Rs 1,625.7 crore in FY19 on a consolidated basis compared to losses of Rs 1,160.6 crore posted in FY18. Amazon Seller Services narrowed its losses by 9.57% year-on-year to `5,685.4 crore during the period.

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