Paytm has recently set up a wholesale arm for its ecommerce business, competing with market leaders Amazon and Flipkart who have progressively leveraged their wholesale ventures in recent years. Regulatory filings confirmed that Paytm Wholesale Commerce was incorporated with Rs 20 crore share capital and in September.
Reportedly, the shares have been subscribed to Paytm Ecommerce, which operates Paytm Mall. As stated in the filing, the objective of the venture is to carry on wholesale and B2B business of importing, exporting, buying, selling, reselling of goods and luxury brands.
Further from the reports, the entity would also be involved in activities as distributor for international manufacturers or brand and a commission agent. Apparently, this could mean that it would be able to assist Alibaba in bringing its products to India. Flipkart and Amazon, holding a market share of more than 80 per cent together, shows that Paytm Mall is a far third as compared to them.
Senior forecast analyst at Forrester, Satish Meena, mentioned that it is tough to scale without having the control over inventory, and this could be a way for Paytm Mall to compete with Flipkart and Amazon. This move could also reflect the intent of Alibaba to bring its goods into India, probably by setting up a seller entity.
Industry experts claim that after the regulatory changes in early 2016, which put a 25 per cent limit on sales contribution from a single vendor to the gross sales of a digital marketplace, focus on wholesale B2B business has become more important.
The financial figures of Paytm for FY18 indicate that the company’s main focus is on its ecommerce venture. It was previously reported that the company lost more capital in its online retail venture, as compared to its digital payment platform. On a total revenue of Rs 774.86 crore in FY18, the company reported a loss of Rs 1,787.55 crore.