Paytm’s Grand India Expansion Plan: Rs 5000 Crore Investment Into Ecommerce To Bring 50 Cr Indians Into Mainstream Economy
“You may say I’m a dreamer, but I’m not the only one”
– (John Lennon’s “Imagine” ; A sign outside the conference room of Paytm’s Noida headquarters)
Paytm has some huge, massive plans for Indian ecommerce; and Vijay Shekhar Sharma, founder of Paytm has just revealed them to the outside world. As per reports coming in, Paytm will invest close to Rs 5000 crore ($755 million) into Indian ecommerce industry, which will aim to increase the number of sellers on their platform to 1 million by 2018. This investment will be spread across three years.
But Vijay’s plans are something bigger – he wants 50 crore Indians to become part of mainstream economy; and Internet and Mobile are the best drivers of this growth.
He said, “We believe that we’ll be able to bring half a billion Indians into the mainstream of the economy. Alibaba have done it in China, and with their help we can do it here.”
Backed by fresh VC investment of $680 million this September, which was led by Alibaba and it’s online payment affiliate Ant Financial, Paytm’s total market value zoomed to $2.5 billion. And now, their next destination aims to be a public company, which a huge reach among Indians traders.
Vijay further shared, “We are talking about a couple more years of 100 per cent or more year-on-year growth, but once this has settled down and become more predictable, we would like to go public”
Paytm Is Different and Unique – The Mobile Advantage
Measured by gross merchandise value (GMV), Paytm reported an annual income of $2.4 billion last year; but it seems that they are not satisfied with this. Infact, Vijay has categorically stated that they are not running behind GMV based valuations and expansions; which makes them different from other ecommerce portals like Flipkart and Snapdeal.
During the interview with Financial Times, Vijay said, “We do not have investors seeking an exit, so we can play the long game.. While these three companies [Amazon, Flipkart and Snapdeal] are fighting over who can sell the most smartphones, we will have a different model.”
Paytm will use Alibaba’s innovative business model of combining mobile based commerce with payment solutions and financial services such as banking and investment to create India’s largest ecommerce company.
They have already announced their massive plan of bringing 1 lakh+ Chinese sellers into their platform, which will connect Indian buyers and sellers with their Chinese counterparts; and sell products for as low as Re 3.
Confirming this business model, he said, “Jack [Ma] had said that when you find a spice trader from India and give them a new market in India online, and then Alibaba can extend the world market to them, then we will have it sorted.”
Paytm has already started their financial services offering by joining hands with Manappuram Finance And Muthoot Fincorp; introduced payment of online insurance; and even entered hotel booking space by partnering with Goibibo, Ezeego1, Via & TSI-Yatra and event ticketing niche.
The advantage which Paytm has, over Flipkart, Amazon and Snapdeal is their reach over mobile Internet users and a solid wallet offering, which these three biggies don’t have.
Snapdeal has acquired Freecharge and launched their wallet, but Paytm has a first-mover advantage. With mobile internet users set to expand rapidly and swell to 500 million users in the next 5 years, we can safely bet that Paytm is going to become a formidable force.
Vijay had once said, “There may be two or five or ten $100 billion e-commerce companies in India in a decade–I don’t know how many, but I want to be one of them..”
We may actually see realization of Vijay Shekhar Sharma’s dream, very soon.