Even as Bangalore based bigger rivals Amazon and Flipkart have launched their annual festive sales, Noida-based new entrant Paytm Mall is planning to spend over Rs 500 crore just in cash back promotions this Diwali.
The cashbacks range from 15 percent to 100 percent on categories such as mobiles, laptop, home appliances, and fashion including apparel, footwear and accessories among others. The company raised USD 200 million from SAIF Partners and Alibaba this year.
Its parent Paytm raised USD 1.4 billion from SoftBank this year.
With rival Snapdeal, vacating the third place, Paytm Mall is planning to capture the third spot in India's e-commerce industry.
In an interaction with Moneycontrol, Amit Sinha who heads Paytm Mall explains why the company is not in a hurry to report profitability and why cashback is required for Paytm's e-commerce business.
He also shares how Paytm is trying to tap smaller cities and merchants, unlike rivals.
On Paytm Mall not focusing on profitability
Profitability is definitely not the most important thing right now. Our priority is to serve our customers and build the business. Aggression doesn’t necessary mean that you throw money while you can.
We bring innovation that is why we are also aggressive on the platform.
On Diwali Sales vis-a-vis rivals Amazon, Flipkart
We have registered 10x growth in festive sales days from ordinary days.
The factors that drove this growth are the cashback offers and how we worked closely with brands and local shopkeepers to ensure a great experience. Customers from over 700 cities have ordered from sellers across 150 cities. About 80 percent of all our orders have been delivered within 24 hours. The offline stores/sale have also started to pick up and they pick up over the weekends.
On huge cashbacks from Paytm Mall this Diwali season
The idea is that we have to make a bigger splash and take shopping to the next level. This will require investments in the right places in the longer term rather than a lower cash burn. So a lot of investments are going into various things.
For consumers, we are offering an aggregate of Rs 500 crore worth of cash back, this festive season.
The cashback is transparently being offered by the sellers, Paytm and brands combined.
On market share versus rivals
We define our market share as the business we are driving for our seller partners. We are looking to contribute 10-15 percent to the festive sales of these partners.
Mobile, laptops, appliances, fashion are bringing good business for us.
On controlling bad post-purchase experience
It was a scenario of the past and to counter it what we have done is that we have shut down many sellers on our platform, a large number of pin codes are also shut down.If I need to manage this efficiently, I will have to ensure that whoever is there on the platform should give the good experience to the consumer.
The social media backlash regarding the poor post-purchase experience is also lower because of our improved services and faster delivery.
On upcoming sales this year
Right now we are going through the ‘Mera Cashback Sale’.
Post this we will move on to individual sales like electronics, fashion and for other categories.
India as a country needs a lot of retailers to fulfill the needs of customers. It depends on the variation of demands and expectations of customers.