Realising groceries could be the key to get repeat customers on its e-commerce platform, Vijay Shekhar Sharma-led Paytm Mall is planning major expansion of the segment. The latest entrant in the e-commerce race, Paytm Mall hopes to earn a gross merchandise value (GMV) of more than $3 billion from just the online grocery segment.
Sharma, the founder of One97 Communications, the company that owns Paytm Mall, said that while 25 percent of the GMV to the overall GMV of the online marketplace comes from groceries at present, by end of the year this would go up to 40 per cent. The company is fast bringing in more FMCG brands on its platform as well as getting into hyperlocal tie-ups with grocers to increase its logistics.
The company hopes to take on Amazon India, which gets more than 50 per cent of its daily grocery orders and is running a number of programmes, including Amazon Pantry and Amazon Now, its two-hour grocery delivery service. “The biggest learning that I have got is that grocery is the fastest growing category in e-commerce. The consumers come back again. We have a daily needs section in Paytm Mall for that reason. At present level, around 25 per cent of the GMV at Paytm Mall comes from grocery; it will go up to 40 per cent. I think groceries would contribute around $3-billion GMV by end of the year,” Sharma said.
Paytm Mall on Tuesday got into a tie-up with yoga guru Ramdev-led Patanjali and would be selling its products on its platform.
The company might also bring Patanjali’s retail outlets into its online-to-offline (O2O) network.
“We are working with a host of partners to grow our network and we are confident that we will be able to achieve our targets by the end of this year. Groceries are an important category for us. It is the biggest spend market for any consumer. We expect that our whole online to offline strategy would help us get numbers,” Amit Sinha, chief operating officer, Paytm Mall, said.
Last year, the platform witnessed a strong surge in sales of fast moving consumer goods (FMCG) products. According to the company, it witnessed 6x growth in FMCG sales by the end of the financial year. Paytm Mall is working directly with all the leaders in the FMCG space, including Hindustan Unilever, Nestle, ITC and Mondelez to offer all their top brands such as Maggi, Lakme, L’oreal, Cadbury, Dettol, Pampers, Mamy Poko and Nivea, among others.
It also holds joint promotions with these brand partners and has collaborated with them for exclusive product launches.
Sinha said that from brands to local partners, the company is working with everyone. “We are bringing in a lot of key elements in logistics. The whole idea is to use more hyperlocal partners to send groceries.” Paytm Mall, owned by Paytm Ecommerce Pvt Ltd, features over 65 million products and has customers across 19,000 PIN codes. The company’s investors include Alibaba Group Holdings, Ant Financial and SAIF Partners.
Groceries have been key to Amazon’s success in making e-commerce a habit among its customers in India and scoring over rival Flipkart. According to industry experts, the grocery segment accounts for a $400-billion industry and is the largest chunk of consumer spending.
The US major has proposed to invest $515 million in food retail over the next five years. It was the first company to get the nod for foreign direct investment (FDI) for setting up “food-only” retail outlets that the government has permitted.
The company is planning to start selling locally made food items through a wholly owned subsidiary in India.business-standard