India: Paytm Mall posts about $2m net loss for fiscal 2016-17

Paytm
Photo: Bloomberg

Paytm Mall reported a Rs13.63 crore loss on total sales of Rs7.35 crore in the year ended 31 March 2017, according to filings with the Registrar of Companies (RoC).

Total expenditure was Rs20 crore, while reserves and surplus stood at Rs1,284 crore, the filings showed.

Paytm Mall (Paytm E-commerce Pvt. Ltd) was carved out from parent One97 Communications Pvt. Ltd, which runs the Paytm payments app, in August last year. It went on to raise $200 million from China’s Alibaba Group (an investor in One97) and SAIF Partners this February.

“These are the initial years for Paytm Mall and we have a long-term perspective on building a successful tech business,” a Paytm Mall spokesperson said in an emailed response to queries.

“We will help customers receive the same trusted retail experience synonymous with our brand and act as a technology enabler for the country’s massive offline retailer community. We will achieve this with our first-of-its-kind online-to-offline (O2O) model that allows us to ensure a seamless experience across offline and online,” the spokesperson said.

While the e-commerce business has existed for at least three years under Paytm, it received a fresh breath of life only recently. Starting this year, the company has undertaken a slew of measures to scale up its operations, pitching it directly against market leaders Amazon India and Flipkart.

At the onset, Paytm moved 800 staff to Paytm Mall and launched a standalone app and website in February. Since then, it has spent substantial resources on marketing and signing up sellers on its platform.

Going head-to-head with the competition, it launched its maiden festival sales event last month, committing to spend over Rs500 crore on cashback offers.

Paytm Mall claims its strategy is different from the market leaders. The platform delivers an offline-to-online experience, much like China’s TMall, wherein the orders are serviced from local brand stores, offering synergies in logistics and warehousing. These brands also have their own web pages on Paytm Mall for easy access.

Simultaneously, the firm is expanding its QR code capabilities to its merchant network in a bid to sign up small-scale local stores to feature on Paytm Mall.

According to RoC documents, Paytm founder Vijay Shekhar Sharma, along with chief operating officer Amit Sinha and company secretary Shweta Sapra, sit on the board of Paytm Mall. Out of the five other board seats, four are controlled by Alibaba and one by SAIF.

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This article was first published on Livemint.com