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Paytm plans to upset Flipkart by changing rules of e-commerce game

Vijay Shekhar Sharma is on a new mission to make Paytm, One97’s e-commerce platform, the largest in the country by overtaking Flipkart, Snapdeal and Amazon

business Updated: Oct 26, 2015 22:15 IST
Suveen Sinha, Hindustan Times
Paytm,One97 Communications,Vijay Shekhar Sharma
Paytm will invest over 900 to 1000 crores in the next 6 to 8 moths to expand. (Official Facebook page of Paytm)

Vijay Shekhar Sharma, the son of a biology teacher from Harduaganj, near Aligarh in Uttar Pradesh, could not pursue MBA after engineering because of lack of money. So he became an entrepreneur to create a company where MBAs would come and work. “It was for personal revenge,” Sharma told HT with a laugh.

One97 Communications, the company he set up, now employs people who passed out of the best B-schools with impressive scores. So Sharma has chosen a new mission, to make Paytm, One97’s e-commerce platform, the largest in the country by overtaking Flipkart, Snapdeal and Amazon.

He thinks it can be done by March next year. And he plans to do it by focusing on all goods other than mobile phones and tablets, which have played a key role in building e-commerce in India.

Flipkart and Snapdeal have been engaged in an open war of claims and counterclaims over the number one position. Snapdeal founder and CEO Kunal Bahl said in a newspaper interview that his company would become India’s largest online marketplace by March. Mukesh Bansal, Flipkart’s head of commerce, hit back two days later to say his company will touch $10 billion in gross merchandise value (GMV) this financial year and nobody will have even half that. Seattle-based Amazon’s chief financial officer Brian Olavsky said in an investor call on Thursday that the company’s India’s unit’s sales had grown four times this year and it could become the quickest of Amazon’s overseas markets to clock $10 billion in GMV. GMV is the total value of all goods sold on a platform without factoring in discounts and returns.

Paytm to focus on selling all items other than mobile devices

Sharma says Paytm, too, will reach $10 billion in GMV, four times what it has now, by the end of 2016, and that will make it the largest. “Can we increase our GMV four times? Well, last year we increased it six times. Now that our logistics platform is ready, brand name established, and money has come in, why not?”

Interestingly, he wants to get there by focusing on selling everything other than mobile phones and tablets, just the way Alibaba, the e-tailer that has invested big money in Paytm, did in China, where the online mobile devices market was dominated by

Mobile devices are easy to buy online because most consumers choose their model offline, making it unnecessary to provide touch and feel online. The lowest price is often a certain hook to catch the buyer because everything about the phones would be the same across sites. If you look at the festival season sales reports of e-commerce companies, mobile devices are said to account for a large percentage. But they constitute only 5% of Paytm’s GMV, according to Sharma.

“It is a Blue Ocean opportunity for us,” he says, referring to the management concept of creating uncontested market spaces. “We will build a bigger e-commerce on a platform called ‘not mobile devices’.”

First Published: Oct 26, 2015 00:05 IST