Future Group teams up with Paytm; Snapdeal tie-up on cards

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Kishore Biyani-led Future Group is partnering e-marketplace operators to extend the reach of its retail store brands. The retailer has entered into a strategic partnership with mobile payment and commerce player Paytm to have Big Bazaar as anchor store on the e-marketplace.

Sources told dna that a similar deal is in the making with another leading e-marketplace operator.

“Talks are at a very advanced stage with Snapdeal.com for online retailing of products and brands being offered by Future Group. The deal should get concluded in the coming days,” said sources familiar with the development.

While Biyani did not confirm the deal with Snapdeal, he said, “We might be selling on Snapdeal on the Maha Bachat Day.”

On the group’s association with Amazon for fashion brands /products, Biyani said, “The association with Amazon was exclusively for clothing brands and for a period of one year. The tenure has already got over some time ago.”

Future’s tie-up with Paytm will make Big Bazaar the anchor store on the Paytm marketplace, allowing Paytm users to make online purchases at Big Bazaar. Biyani said as a core anchor customer, the Group will offer every merchandise in categories like food, fashion and home on Paytm’s e-marketplace platform.

“We are also working on how to make the unit economics work in a manner that’s beneficial to the customers, Paytm and the Future Group. It’s a win-win scenario because, Paytm’s cost of acquiring the customer is the lowest and we will manage distribution /cost of fulfilment to the lowest possible given our set up and huge investments in that area. We believe ultimately in this business, unit economics will play a crucial role for any player to survive in this business and this partnership delivers just that,” said Biyani, adding the new delivery format will be used extensively for the group’s FMCG play to launch new brands and products.

The deal, Vijay Shekhar Sharma, founder and CEO, Paytm, said is exclusive in terms of anchor customer and that Paytm will not have another anchor customer in the same category. In terms of tenure for this partnership, Biyani said they will be getting into definitive agreements very soon. Paytm currently has a user base of more than 125 million and daily average transaction value of Rs 72-odd crore (gross merchandise value).

While Biyani did not give any targets from the Paytm partnership, the Group will be looking to clock in sales worth at least Rs 1,000 crore for the upcoming August 15, 2016 sale. “Last year it was much lower. We are expecting increase of 30-40% on-year sales growth this time around. While there will be crazy offers, Paytm will top it up with 15% cash-back offer for consumers using Paytm Wallet to make purchases, in addition to various other benefits extended exclusively for that day,” said Biyani.

On the group’s e-commerce strategy, Biyani said it will keep on evolving as they have been continuously experimenting with this format. “We just launched our fast fashion brand Cover Story on Myntra and it’s one of the biggest success story in terms of a brand launch,” said Biyani.