‘We want to create endless aisles for shoppers’: Amit Sinha, COO, Paytm Mall

Softbank-backed Paytm Mall is focussing on further strengthening its offline to online (O2O) model to position itself as an omnichannel player in the Indian e-commerce space.

softbank, Paytm, paytm mall, paytm bank
Amit Sinha, COO, Paytm Mall.

Softbank-backed Paytm Mall is focussing on further strengthening its offline to online (O2O) model to position itself as an omnichannel player in the Indian e-commerce space. It recently launched a PoS solution for retail stores to enable shopkeepers manage walk-ins and online customers. Paytm Mall’s Amit Sinha talks about how the e-commerce player is addressing the offline-online divide and partnering with retailers for seamless experiences in conversation with BrandWagon’s Ankita Rai. Edited excerpts:

What are the key pillars of your business strategy? How do you position Paytm Mall vis-à-vis competition?

When it comes to a consumer requirement, we are a horizontal player and address all customer needs — from impulse purchases to one-off purchases like bikes and laptops or grocery and electronics. On the supply side, we do not have any competition. India has 50 million shopkeepers. They add big value not only when it comes to reaching every nook and corner of the country, but also play a major role in selling products. The local retailer’s recommendation plays a big role in consumers’ purchasing decisions. Shopkeepers do a stellar job at this. However, 96% of offline stores are under 500 sq ft and face challenges with keeping all stock/sizes/materials and there is a massive cost associated with it. In addition, they are not able to offer all kind of services such as loans or cashbacks. This limits their ability to convert customers. For example, a brand like Samsung has around two lakh stores. It is difficult to run offers in more than 2,000 stores at the same time. We are democratising it and making it easy to run offers at all stores simultaneously.

What percentage of your sales comes from the O2O model? How will Paytm Mall’s PoS solution help shopkeepers manage offline and online?

Our O2O model is deeply in sync with what offline shopkeepers need. Paytm Mall PoS will help retailers cater to walk-in customers conveniently and can also fulfil online orders locally through this connected PoS system. Up to 80% of offline retail stores do not have the necessary technology to manage their inventory. The PoS solution will help manage their store inventory on the cloud with complete visibility on the available/ required stock, while also helping them manage pending orders, execute offers and promotions. We have also launched a digital experience zone to give a virtual interactive experience to the customer once she walks into the store. The idea is to create endless aisles for shoppers and reduce the reliance on physical inventory.

As of now, 75,000 shopkeepers are working with Paytm Mall. The target is to increase it to three lakh by December, 2018. We will spend $30 million on educating retailers about the PoS solution and also on technology development. In the first phase, we have tied up with Taiwanese company Asus. It will install the solution at 5,000 of its stores by the end of December this year.

We expect around 60% of sales through the O2O model and the rest through the marketplace. Currently, almost 25-30% of sales on the platform are via the offline route. We are not looked upon as competition but rather as partners by the distributors. Our game is not sourcing. We are not into managing inventory.

Within one year of your operations, you are number three in the horizontal space. How do you look to build loyalty and repeat purchases in a market led by discounts and ruled by players like Amazon and Flipkart?

Customers are price sensitive but not in all categories. In fact, 80% of online players’ GMV comes from mobile. While it is a leading category in e-commerce, in the long-term, grocery and fashion will be the game changers, where consumers shop for convenience and better products, not discounts. For grocery you will use an app which you are comfortable with everyday. For fashion you need to browse endlessly.

We are looking to focus on repeat customers.In mobile, there is bargain hunting but that is not true across electronics. In the O2O model, selling and handling large appliances is easy as we don’t have to stock them. We are delivering ACs and refrigerators the very same day. The way we are building it is: the order goes to the nearest seller and the focus is on price and experience. While discount can lead to the first transaction, loyalty comes once you have fulfilled all the needs of consumers and have also matched the prices.

What is the GMV figure you are targeting for FY19? Which category contributes the most to your GMV?

We are targeting $9 billion in GMV this fiscal. It will be a healthy mix of grocery, fashion and electronics. With more than 50% share, electronics is the largest category GMV-wise. It is because these are heavy purchases and easy to purchase online due to offers and availability of finance options. We are among the largest players when it comes to appliances and laptops. However, in mobile, we are not very close to our competition. The share of grocery is 30-35% order-wise. In terms of items, grocery is the largest category followed by fashion.

We have aggressive marketing plans this fiscal and plan to spend more than Rs 1,000 crore on marketing this year. We are looking to monetise through tech-enabled services. PoS is a subscription-based service. We will charge a specific monthly fee as well as a percentage of the transaction amount from merchants for each transaction.

Are you planning to further expand the grocery category in your overall mix?

In e-commerce, grocery could be the key to get repeat customers. We are looking to expand this segment and are planning deliveries in a box. The average order size in grocery is upwards of Rs 2,000.

Bulk grocery purchases happen at the start of the month and then, it is mostly restocking. Except for fruits and vegetables, consumers are fine with three-four days delivery time. However, the order should come in one basket. While we cannot promise that, we are working with partners to deliver grocery items in two or three baskets. We have partnered with Bigbasket in this space.

What have been the key learnings on which you have built your strategy?

The consumer needs multiple categories. So in order to build a sustainable business in the horizontal space, we have addressed her varied needs. Second, it is beneficial to partner with ecosystem players. Third, we are using technology to digitise offline retailers, in addition to partnering with distributors. These learnings form the key pillars of our strategy.



Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express Telegram Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.