Digital wallet and e-retailer Paytm, which claims it has 100 million users, is looking to enter the hyper-competitive food & grocery delivery space. Founder Vijay Shekhar Sharma tells Prabhu Mallikarjunan the food ordering business will be driven by the same IT platform.
What are the learnings from the visit to the Alibaba office in China? What will you be doing here?
Alibaba recently invested in online food delivery business Ele.me. The opportunity in this segment is bigger in China than in India. But hopefully, we will work with food delivery companies and build something here, using our platform. You may expect some news soon. The O2O, or online-to-offline, commerce segment is turning out to be way bigger and far more important than we had assumed. It’s creating a half-a-trillion-dollar opportunity for Alibaba and it’s a category we want to be identified with in India.
What changes are you seeing in the merchant ecosystem?
Merchants who have been impacted by online players are now looking for an online presence. Being a technology company, we are trying to get customers at a much lower cost than offline players and will ensure merchants are able to increase their sales.
We also expect them to participate in cash-back offers a lot more than they did last year. During Diwali, we were running 100% cash-backs but unlike other marketplaces, all of these were sponsored by the merchants. There was no contribution from Paytm, which is why November was a profitable month for our marketplace.
How will you leverage the investments in Jugnoo and Little?
We are trying to diversify our portfolio via the investments in Jugnoo — an auto-rickshaw aggregator — and Little, a hyperlocal deals discovery app. In November, Little gained enormously from the transactions conducted on our
platform. Once we upgrade our app, we would not mind allowing other O2O players to transact on our platform.
Any business acquisitions plans for 2016?
Instead of acquisitions, our approach has been to invest in businesses and to let them be run by entrepreneurs. We will continue to do that.
What have been the learnings from personalities like Ratan Tata and Jack Ma?
One learning from Ratan Tata is to remain humble. Jack Ma has taught us not to stop at one business but to see what can be built out of the businesses we have.
You were to shift base to Bengaluru?
I think Bengaluru’s traffic is underestimatingly (sic) horrible. And if Bengaluru has an advantage because of its start-up ecosystem, Delhi’s infrastructure is better. So, we will stay in Delhi but will continue to expand our Bengaluru unit.
What are you expecting to do in 2016?
Now that our marketplace has gained significant traction, the e-commerce and payments pieces will become independent app and businesses. Our budget in the coming year for the marketplace is about $450 million, which includes marketing spends. We will focus far more on the O2O space including the food and grocery segments.
2015 was a good year for you…
Our biggest achievement in 2015 was getting money from Alibaba and Alipay. It was a formative year for mobile payments in the country and we are happy we led it. We have changed people’s mindsets on mobile payments.