In a move that could indicate the rekindling of Paytm's e-commerce ambitions, the fintech major has been testing a feature that places shopping via the Open Network for Digital Commerce (ONDC) option just beside scanning QR codes for making payments on its home page.
While Paytm was the first buyer-side app on ONDC, the feature was typically being moved around between different scroll lengths, from the top to somewhat deep down, depending on offers till recently. The pilot of the new feature keeps ONDC alongside scanning QR codes for payments static on the homescreen even as the user scrolls through the length of the page to check out other products like ticket bookings, games, share trading, etc.
Moreover, the app has also re-designed its landing page for ONDC shoppers which carries a masthead that reads ‘Paytm loves (heart symbol) ONDC’. The new landing page boasts a cleaner look, with banner ads announcing deals and clickable options for the buyer to directly go to categories like food, grocery, electronics, fashion, etc.
This comes at a time when multiple tech unicorns, such as Ola, PhonePe, Meesho and Shiprocket, have taken a bet on the government-backed ONDC that is aimed at breaking the stranglehold of a few players like Amazon, Flipkart, Zomato and Swiggy on online retail in the country.
According to industry sources, after missing out on the first wave of unified payments interface (UPI) growth where rivals like Google Pay and PhonePe became market share leaders, Paytm wants to make the most of the ONDC opportunity. “Vijay Shekhar Sharma (Paytm founder and CEO) himself is taking a keen interest in how ONDC shapes up,” said a person close to the developments.
To be sure, Paytm said last year that it has no direct or indirect shareholding in Paytm Mall (Paytm E-commerce Private Limited), the buyer app entity that transacts with consumers on the fintech app. Paytm Mall is not a part of the One97 Communications (OCL) group, although it uses the Paytm brand and receives other services from OCL.
As such, industry experts say that Paytm is likely to receive a commission of the revenue that Paytm Mall earns via ONDC. Further, it would also help the fintech bolster its gross merchandise value and pull in payments revenues.
In the quarter ended September, Paytm said that its revenue from commerce and cloud services — the segment that includes its movie ticket booking, advertising, loyalty programme and allied businesses – had grown 12 percent year-on-year to Rs 423 crore.
Paytm Mall has already burnt its hand in e-commerce once before. It had raised $400 million from investors like Alibaba and SoftBank at a valuation of over $2 billion in early 2018. However, that bet went sour as Alibaba sold its entire stake in the company at a valuation of just over Rs 100 crore in 2022.
Around the same time last year, it announced a pivot to the ONDC model wherein every part of the transaction — buyers, sellers, logistics and payments are dis-aggregated into separate modules. In effect, the ONDC model allows a scenario where one player could be the interface for buyers, a different player could onboard sellers and a third one might be doing the logistics of the delivery.
Earlier, ONDC said that it had recorded nearly 12 lakh transactions in the festive season leading up to the Diwali week (November 6-13) from 600 cities, and across categories like food and beverages, home and decor, fashion, electronics, etc.
According to an internal slideshow of ONDC accessed by Moneycontrol earlier, retail purchases on the network rose almost 500 times from 1,281 in January to 608,307 in September. Apart from deals and discounts funded by ONDC, industry executives feel lower commissions on the network than e-commerce majors like Amazon, Flipkart, Zomato, and Swiggy have enabled sellers and network players to offer better prices to consumers.
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