If there is one company that has shaken up Indian e-commerce in recent months it is Paytm. The Noida-based company, which took a mobile-first and wallet-first approach to e-commerce, claims to command 80% market share among wallet users in India. Paytm, which started out in 2014 as a wallet service, is currently at a gross merchandise value run rate of Rs 12,000 crore.
(UPDATE: Bipin Preet Singh, Founder and CEO of consumer mobile wallet solution provider MobiKwik, has disputed this claim. "We have more than 50% share in wallet...MobiKwik is the largest wallet with 25 million users," says Bipin.)
Its mobile-first marketplace is home to over 50,000 merchants and the platform is processing over 75 million orders a month. On Tuesday, Chinese e-commerce giant Alibaba and its payment arm Ant Financial pumped in $500 million into the company. SAIF Partners and Ratan Tata are the other investors in the company.
Paytm’s Founder and CEO Vijay Shekhar Sharma has said his aim is to make Paytm “an Internet conglomerate” and not just an e-commerce company and he is putting the various pieces of the puzzle together. The acquisition of the payment bank license, announced in August, will help the company move further down this path.
Paytm’s wallet-first approach is different from that of its e-commerce rivals, Flipkart and Snapdeal. Online retail pioneer Flipkart has had some well-documented issues with getting a wallet license. It has now invested in mobile payments platform ngpay and has acquired a majority stake in FX Mart, which holds a prepaid payments instrument license.
Snapdeal, on the other hand, acquired recharge provider Freecharge earlier this year. In September, Freecharge launched a semi-closed wallet. Paytm and Snapdeal now share a common investor in Alibaba.
Paytm has also set aside $150 million to invest in tech startups. The company has already made investments in auto and taxi aggregator and hyperlocal delivery startup Jugnoo, hyperlocal deals startup Little and logistics data venture LogiNext.
Paytm’s Vijay, in a video interview with YourStory, said the focus would be on empowering merchants to sell more and on reaching profitability.
(Disclaimer: Ratan Tata, an investor in Paytm, has also invested in YourStory Media)