Paytm Mall Shuts Down Fulfillment Centres, Stops Cashbacks; Sellers Stuck With Rs 150 Cr+ Unsold Inventory
Paytm Founder Vijay Shekhar Sharma has rubbished the news about Paytm Mall's closure
There is some bad news coming in for Paytm Mall users. As per reports coming in, Paytm Mall may shut down soon.
What exactly is happening with Paytm Mall?
Paytm Mall Shuts Down Fulfillment Centres Pan-India
As per a report by The Hindu, Paytm Mall has shut down several of their fulfillment centers pan-India. This has been done as their consumer-oriented business is down.
Paytm Mall Loses 88% Traffic
The reason for closing down so many fulfillment centers is less business, and this is evident from the traffic.
As per Hindu, Paytm Mall has lost 88% of the traffic since last year: In October last year, Paytm Mall had received 45 million hits, which has now come to down to mere 5 million in the month of January.
Paytm Mall Cashbacks Ends
Meanwhile, Paytm Mall has also removed almost all cashbacks from their portal. This again proves that Paytm Mall is losing business, and hence, sees no advantage in offering cashbacks.
Sellers Stuck With Unsold Inventory
A direct result of closing down fulfillment centers and removing cashbacks is unsold inventory.
Sellers on Paytm Mall has claimed that they have around Rs 150 to Rs 160 crore worth of unsold inventory, and as there are no fulfillment centers, they cannot do anything with that.
A FMCG seller from Mumbai said, “They (Paytm) asked us to stock a month’s inventory for December last year and now asking us to take back the inventory. They have shut the fulfilment centres at several places. We can’t return these unsold inventory back to the manufacturers now,”
Another seller complained: “Paytm stopped giving cashbacks and this has resulted in heavy losses for us as consumers have stopped buying. I was doing business worth ?10 crore a month, but now it has come down to ?10 lakh. They stopped cashbacks without even informing us,”
What Will Be The Future Of Paytm Mall?
In October last year, senior management at Paytm Mall held a series of board meetings, and have decided to only focus on B2B business, and close down B2C business model.
B2C business is capital-sensitive, and although Paytm Mall has raised Rs 2900 crore from their parent company, they see no future in the B2C space, where they need to compete against the likes of Facebook and Amazon.
Within the B2B niche, Paytm Mall is planning to embrace the Offline to Online model, which Reliance is also targeting. This is the reason Paytm acquired Little and Nearby in 2017 to strengthen their last-mile delivery mechanism, and hyper-local deliveries.
Paytm founder Vijay Shekhar Sharma has rubbished the news that Paytm Mall will close down, and have said that their GMV is actually growing.
He said, “I have mentioned earlier also that we (Paytm Mall) will have a majority business by O2O category. Grocery from our store is becoming bigger and bigger,”
In FY18, Paytm Ecommerce reported 100% increase in revenues at Rs 775 crore, but at the same time, reported 1500 times increase in losses at Rs 1800 crore.
We will keep you updated, as more details come in.