Moneycontrol
Sep 29, 2017 06:37 PM IST | Source: Moneycontrol.com

Diwali sales: How Paytm Mall is planning to give Amazon, Flipkart a tough fight

Paytm Mall is leaving no stone unturned in ensuring an aggressive growth—from offering a cashback of Rs 500 crore this festive season to announcing Rs 100 crore specifically on media campaigns ahead of the Diwali festival

Diwali sales: How Paytm Mall is planning to give Amazon, Flipkart a tough fight

Priyanka Sahay & Harsimran Julka
Moneycontrol News

As festive sale fervour catches up in India, employees at Noida-based Paytm Mall can be seen hopping from Los Angeles and Singapore to Dubai and Hangzhou.

Inside Paytm offices, these are not the names of the cities, but titles given to conference (nicknamed war) rooms

We are at the four-storeyed building of world’s Paytm in Sector 6 of Noida.

Enter Paytm office and you find a giant poster saying Go Big or Go Home on the ceiling.

It also says a quote: “We will bring half a billion Indians to the mainstream economy. That’s our Wow. That’s our Game.” Opposite that, is a poster showing an astronaut - It says: To Pioneer, Paytm is here.

The pioneer in financial wallets is now trying it bring online to offline (O2O) strategy home.

From office floors lined up with mattresses at night, to endless cups of coffee, employees at Paytm Mall are not leaving any stone unturned these days to give tough competition to the likes of Amazon and Flipkart in India.

Sinha takes us to a tour of the floor. Vashishtha, Dhindsa and Patil join us. We walk down the aisle which is lined up with artificial plants and the flooring is still in raw shape. The walls of Paytm’s new office have been given a smoothened brick feel, without paint.

“This is where most of our tech team sits,” Sinha points out to the floor housing close to 400 employees.

IMG_20170927_165757

Paytm's senior leadership team: From left: Bhushan Patil (President - Paytm), Saurabh Vashisht (vice president - Paytm), Amit Sinha (Chief Operating Officer, Paytm Mall). 

Paytm Mall is a late entrant in India’s e-commerce race as compared to rivals Amazon and Flipkart. The race has already seen a dead (or shall we say old) horse - Snapdeal - recusing itself leaving the third spot open for grabs.

And that is why Paytm Mall is leaving no stone unturned in ensuring an aggressive growth—from offering a cashback of Rs 500 crore this festive season to announcing Rs 100 crore specifically on media campaigns ahead of the Diwali festival.

“This financial year end, we are targeting an annualised run rate of USD 4 billion. During the Diwali season, we are targeting USD 0.5 billion and we are almost on track,” says Sinha, an old timer at Paytm’s parent firm One97 Communications, who has spent almost a decade in the company.

In a recent report, industry tracking firm Redseer has said that Flipkart led the last week’s five-day festive sales with a 58 percent market share in the gross merchandise value of goods sold. It also said that Amazon India saw a decline in market share during the annual festive sales to 26 percent from last year’s share of about 32 percent. The report, however, doesn’t even mention Paytm Mall’s share.

This perturbs Sinha who questions the methodology of RedSeer Consulting, saying it was not relevant for their model.

“The way they track the number is mostly based on the number of shipments. For us, a large chunk of that is coming from the stores. So that is not there,” he says.

“Secondly, the way our sales are planned is across the month...we are not in an inventory-led model, we don't buy lakhs of phones and then sell them,” he explains.

The company recently raised USD 200 million from Alibaba Group Holdings and SAIF Partners.

Paytm-office-job-workers It is letting users book a mobile phone or even small ticket items such as grocery from their nearest kirana stores. This Paytm terms as the Online-to-Offline model.

Posters for shopkeepers to drive O2O strategy

Paytm vice president Saurabh Vashishtha then shows us bags of freshly printed posters of Paytm Mall which will be shipped to towns and cities of India. These posters have a space for a QR code, which a shopkeeper can just paste on the walls of the stores and start accepting payments.

On the whiteboards are scribbled names of retailers with a number of stores. These retailers will be shipped the posters for use at each of their store locations.

There are thousands of posters being printed that the company will send to the select stores. Many stores, according to Vashishtha will also print their Paytm posters by themselves.

“For all the offline stores…the festive sale has just started to happen. Peak will be during the four-day weekend…again we don’t know whether the four-day weekend will be picking up in Delhi because most people leave Delhi during festivals, many go to their hometown,” says Sinha who himself hails from Dhanbad.

He, however, adds that in cities like Kolkata and Gujarat this is the peak season. Also while for automobile, especially bikes this is the peak season, appliances will pick up closer to Diwali, he says as we take a seat in a room called ‘Beijing’.

Overlooking this building is the One 97 Communications’ building where chief executive officer Vijay Shekhar Sharma sits along with most of the corporate team including Sinha and Patil.

Capturing the heartland

Looking down below from ‘Beijing’ and we see a chaos of rickshaws and tempos honking in a traffic jam, even as a cow is roaming carelessly on the side - typical of an Indian street.

Unlike the glass skyscrapers where MNC companies have their offices, Paytm’s heart and soul lie with the shopkeepers and traders of small-town India - who drive most of the USD 630 billion retail business. The retail market in India is expected to double to USD 1.1 trillion by 2020.

Paytm which has captured the imagination of the local milk store, juice shops, and kiranas, now plans to capture the high-margin fashion and electronics retail business through Paytm Mall.

Whether Sharma and his team will be able to give Amazon and Flipkart a run for their money, only time will tell.
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