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Alibaba-subsidized firm cutting down B2C biz, remaining down fulfillment centers
Alibaba-sponsored Indian e-commerce company Paytm Mall appears to be losing steam quicker than predicted even as the business enterprise plans to alternate its business version.
According to resources, the corporation has been cutting down its B2C (business to the purchaser) commercial enterprise, shutting down the fulfillment centers and has almost stopped giving cash back.
This has also led to a significant drop in visitors to the Paytm Mall’s internet site. According to SimilarWeb, a New York-primarily based website that gives web analytics for corporations, the traffic to Paytm Mall has come right down to five million according to a month in January 2019, a whopping 88 in line with cent decline from 45 million site visitors a month in October closing year.
According to assets, issues started for Paytm Mall in October last year after the agency, following a series of board conferences, got here to the belief that the B2C version changed into not sustainable, and it wishes to scale down the business slowly and transfer to a B2B model with a web to offline (O2O) approach. The business enterprise’s awareness on the method appears to be consistent because it had received two hyperlocal deal marketplaces — Little and Nearby again in 2017 — to strengthen its presence inside the O2O area.
Move hits dealers
However, the scaling down of the B2C enterprise has hit numerous Paytm Mall sellers, who’re now caught with inventory. “They (Paytm) requested us to stock a month’s inventory for December last 12 months and now asking us to take back the stock. They have shut the fulfillment centers at numerous places. We can’t go back those unsold inventories back to the manufacturers now,” stated a Mumbai-primarily based FMCG supplier. BusinessLine spoke with over a dozen sellers across classes and each certainly one of them noted the same trouble.
A lower back-of-the-envelope calculation indicates that the dealers are stuck with inventory worth ₹150-one hundred sixty crores.
“Paytm stopped giving cash back and this has resulted in heavy losses for us as customers have stopped shopping for. I changed into doing business worth ₹10 crore a month, however now it has come right down to ₹10 lakh. They stopped cashbacks without even informing us,” every other seller said.
A Delhi-based totally supplier said: “This is the final of the leftover shares parked on the fulfillment centers and no dealer has despatched any inventory within the last months. The unsold stock now will become our duty.”
Paytm Mall, which becomes started in 2017, raised greater than ₹2,900 crore in the final investment year and has been incurring huge losses. As in step with its filings with the Registrar of Companies sourced from Tofler, Paytm E-trade Private Ltd mentioned a 100 consistent with cent growth in its sales for FY18 at ₹775 crore. During the monetary, the organization’s losses grew a whopping a hundred and fifty times to ₹1,800 crore.
Founder denies price
Vijay Shekhar Sharma, the founding father of Paytm, has rubbished all of the allegations. “I have cited earlier additionally that we (Paytm Mall) can have a majority business through O2O category. Grocery from our shop is turning into larger and bigger,” Sharma advised BusinessLine. He similarly claimed that the corporation’s GMV (gross merchandise fee) has grown and that the employer is pushing the stock of offline shops closer to customers for faster shipping.
Experts attribute the restructuring at Paytm Mall to the reduce-throat opposition inside the e-commerce market in which Flipkart and Amazon have surely set up their dominance.
They feel that Paytm appears to be losing its identity by using getting into many agencies — from bills to banks to mutual price range to e-trade.