Paytm Mall, which is hosting its first 4-day festival sale called 'Mera Cashback Sale', has seen a ‘good response’. Mobiles, laptops, consumer electronics are the highest sold items followed by groceries which anyways is a regular bought item monthly, says Amit Sinha, Chief Operating Officer.
The e-commerce platform aims to become the most sought-after and preferred destination for shoppers, and hopes this pre-season festival sale (ends on 23 September midnight) is the kickstarter to the year-end target of $4 billion. Sinha shared his plans for the online platform with Firstpost, and the targets set for the first year of operations.
Excerpts from the interview:
It is the first pre-festival discount season for Paytm Mall. You are giving away Rs 200 crore worth of freebies and earmarked another Rs 1,000 crore for discounts. What is the return on investment you see with this kind of investment?
The total investment earmarked is Rs 1,000 crore. Cashbacks, media promotions and incentives to retailers and shopkeepers are part of this budget. Rs 200 crore is not our investment but comes from our brand partners and shopkeepers by way of freebies, etc. We are not looking at Return on Investment in the traditional sense. I cannot put aside a chunk as ROI as a lot of our spend is on brand and brand promotions, etc. We have reached half a billion dollar in sales already and our overall run rate is expected to be $4 billion by the year-end. But what we expect is that we will be able to attract a large chunk of new shopkeepers and customers on both sides of the platform. We are confident of doing this because of the unique experience we offer in both sections. Our model is different from others in the same space. We realise that the approach taken by e-commerce platforms has not tapped into millions of shopkeepers and retailers across the breadth and length of the country and also into technology that can bring in even the smallest shopkeeper online.
How different is your approach?
We believe every retailer and shopkeeper should be able to use technology. See, I can’t have 100 warehouses as that is an impossible task. I come from Bihar and there are districts there where people use a different dialect, follow a different culture and their thought processes are different as well. So, within a state you have so many differences. We have deliberately looked at a broad and very deep distribution channel that co-opts all these differences and caters to customers. Our focus is to have a very localised approach. We are helping small shopkeepers and retailers to advertise using our technology. Both of us – the shopkeeper, retailer and Paytm Mall benefits from this approach. On the other side you have millions of customers whom we want to attract and help them with the ease of using our app. They can do transactions from anywhere and delivery will be given to them at their convenience.
But ease of using app and doing transactions, etc. is what other e-commerce platforms are also doing at present.
What we offer is unique. You could choose a Benarasi sari from a store in Benares on our site but we enable your local shopkeeper who sells these saris to source it and deliver it to you at the earliest. Most of us know how when we go to an offline store in our locality and don’t get, for instance, the shoe size we want, the shopkeeper usually assures us that he will get it in the next two or three days. That is the same principle our shopkeepers and retailers will apply online with us. We have done many many such innovations. Shops can work in a more structured manner by coming on to our platform.
We focus on our distribution network as each of the retailers add value and are trying to enhance that value online. Recently, we had a request from Port Blair. If I had to source the product from Delhi and send it to Port Blair it would take 5-7 days. Instead, I can appoint a shopkeeper at Port Blair and he will do the transaction on our behalf and can add better value in terms of quickness of delivery for the customer. Of course, the price difference might not be much or the discount might not be deep in few such cases. But, if a customer wants the product from the place of origin and if it is not possible to source it from a local shopkeeper, we tell the customer that deliver will take a few days. Around 80-90 percent of our businesses are sourced locally and the customer gets the product on the same day or within a couple of days.
Another difference is that we only allow two kinds of people to come and do business online. Only brands and those who have a store offline can come to our platform. If the retailer or dealer does not have a presence in the real world he/she cannot be on Paytm Mall.
Though what we have noticed in our pre-sales season is that mobiiles and laptops, consumer electronics are the most-bought items from our platform, what is the difference here is that most of the online retailers here offer after-sales service too. Our sales on the first day of the month does well too.
What are the gross sales that you look to garner during this festive season? Amazon and Flipkart are talking of billion dollar sales.
We are targetting half a billion or so. Our success parameter is not half a billion though. If all the shopkeepers, retailers and dealers can also make profits through us, then we are assured of a long-term relationship. Towards that end, we have been providing training to shopkeepers, dealers and retailers for usage of tech in business.
Has your business on Paytm wallet also increased because of the sale?
Almost all transactions on our platform is prepaid and less than a half percent is cash on delivery. We are quite far off from the business growth showing its impact on our wallet.
Do you think demonetisation and GST has impacted enthusiasm of shoppers?
I think the effects of demonetisation is over. But the good thing is demonetisation has made almost all shopkeepers digital savy. I don’t think GST affects the customer much. We continue to see high growth and there isn’t any perceptible change in shopping pattern that we have noticed yet.
Published Date: Sep 22, 2017 03:55 pm | Updated Date: Sep 22, 2017 03:55 pm