Paytm Mall claims to reduce monthly spends to Rs 40 Cr, targets EBITDA breakeven by FY 2022
Indian ecommerce major, Paytm Mall on Monday said that it is targeting EBITDA breakeven by financial year (FY) 2022.
The company also claimed that it has reduced spends to Rs 40 crore on a monthly basis, including all costs. Paytm Mall said it is now focusing on breaking even, on a per order basis by reducing the costs of logistics.
The company further claims that it has aggressively cut down costs internally by one-third. With over 100,000 sellers, it has moved away from the warehouse-led model to the local shopkeeper model.
Srinivas Mothey, Senior Vice President of Paytm Mall said,
“Every order that we deliver is profitable and on order basis, breakeven. We do not lose money on any order we ship. More than focussing on (Gross Merchandise Value) GMV, we are focussed on increasing revenue and factors contributing towards it. We expect that 70-80 percent of the orders will be shipped from the same city. We would be happy to be a cost attention company rather than no attention at all.”
The company is investing in technology and creating customer demand using Paytm’s traffic.
In a statement to the media, the company said they have huge costs on the supply side, discounting, logistics and returns, and that it has learned that by partnering with local shopkeepers and merchants, the company will create more local supply with the logistics being taken care by the shops itself.
“Our business model is to help shopkeepers by providing better technology and financial services as they don’t have a strong supply chain, and they find it difficult to source products, assortment and sometimes loans. We have been shipping orders from the store or same city where the shopkeeper uses their own local logistics. It is overwhelming to see our customers and merchants being excited as we continue to grow,” Mothey added.
Paytm Mall hopes to scale its platform by three times.