Paytm Mall, a marketplace operated by Paytm E-commerce, is expanding its base with broader foray into the fast moving consumer goods category.
Paytm Mall, a marketplace operated by Paytm E-commerce, is expanding its base with broader foray into the fast moving consumer goods category. The company claims that the category contributes about 40% of the total volumes on Paytm Mall, and it targets 50% volume by the end of the festive season this year and six times growth by fiscal-end. “Over 60% of all Paytm Mall customers have shopped FMCG products on the platform, and the category has registered a repeat rate of over 70%,” said Amit Sinha, COO of Paytm Mall. Paytm Mall reported total loss of Rs 13.6 crore in the first seven months of operations ended March 31, 2017, according to company’s filings with the registrar of companies (ROC). During the period, it recorded a total revenue of Rs 7.3 crore. Focus on daily essential such as staples, cosmetics, laundry, etc, puts Paytm in direct competition with Amazon Now, BigBasket and Grofers. The online grocery market continues to heat up as investments to the segment increased to $4 billion in January-June 2017 against $1.6 billion in the corresponding period of 2016, data from Jefferies show.
Amazon Now has seen a favourable uptake in metro markets such as Bengaluru, Hyderabd, Delhi and Mumbai, and delivers everyday essential within two hours of placing the order. Over the next few months, the company will be expanding its reach to more pin codes. “Using AmazonNow app, customers can shop from their neighbouring local stores and get the products delivered to their doorsteps. The products are picked from the store by the Amazon delivery executive and delivered to the customers on the same day,” an Amazon spokesperson said Apart from AmazonNow, the company also runs other offering — Subscribe & Save, Super Value Day and Amazon Pantry — under the FMCG category.
Additionally, Flipkart is also expected to enter the grocery market and is exploring acquisitions in the space, its CEO Kalyan Krishnamurthy said earlier this year. Flipkart’s initial venture in grocery — Nearby — had to shut shop in February 2016 due to lack of demand and low margins. Additionally, players like TinyOwl, LocalBanya, PepperTap have shut down while Grofers and Zomato downsized operations in non-metro markets.
“Our strategy is to host the largest assortment of products of daily need on our platform and get these items delivered to every city and town within 48 hours. This approach empowers our partnered brands and enables them to control their offline distribution channel, while allowing us to scale faster,” Sinha added. Sources added that the O2O (online-to-offline) push of the company will help Paytm tie-up with larger number of retailers. Additionally, the tie-up with Big Bazaar may help the company in hyperlocal delivery. To expand its play in FMCG, the company will be investing Rs 50 crore on seller training, marketing and logistics, Paytm said.