Paytm had spun off a separate e-commerce entity in FY2017, which posted a hefty loss in its first operational year, which was bigger than government's bullet train budget for this year.
How big is Paytm Mall’s loss? The Narendra Modi government earmarked an amount of Rs 1,800 crore for the ambitious Mumbai-Ahmedabad bullet train project this year; Paytm Mall’s loss in the financial year 2017-18, its first full year of operation, was slightly bigger than that at Rs 1,805.6 crore, a report has shown.
“Paytm had spun off a separate e-commerce entity in FY2017, which posted a hefty loss of Rs 1,800 crore (Rs 18 billion) in FY2018,” a report by Kotak Research said. Concluding that cash burn in the Indian e-commerce industry is on the rise, Kotak pointed out, that going forward in FY19, the losses of e-commerce industry will only widen.
The report said that not only will Flipkart and Amazon’s losses be higher, but Paytm has emerged as a new competitor, having racked up losses of Rs 1,800 crore (Rs 18 billion) in its very first full year of operation. According to data, Paytm Mall’s revenue in FY18 was Rs 7,44 crore (Rs 7,442 million).
Despite the loss, both Walmart and Amazon have stated their intent to continue to invest in their Indian entities, the report said, adding that Alibaba’s steady fund infusion into Paytm mirrors a
Paytm Mall’s combined loss between FY16-18 comes around Rs 1971.04 crore ($282 million), 44% of the total funds raised till date Rs 4,508.23 crore ($645 million). Paytm Mall is currently the third biggest player in India’s rapidly-growing online retail space after Amazon and Flipkart.
In April this year, Paytm Mall raised close to Rs 2,900 crore ($400 million) from SoftBank Investment Holdings and Alibaba.com Singapore e-commerce in a deal that valued the online shopping venture of Paytm at Rs 13,979 crore ($2 billion).