Alibaba-backed marketplace, Paytm Mall, is reportedly scaling down its B2C business, and also closing fulfilment centers across India. Paytm Mall has also stopped giving cashbacks on products across the platform, while sellers are stick with unsold inventory of over Rs 150 crore.
Citing sources, The Hindu BusinessLine reports that the problems for Paytm Mall started back in October 2018. And after a series of board meetings, the company came to conclusion that the B2C model wasn’t sustainable. It has also decided to slowly scale down the business and switch to a B2B model having an online to offline (O2O) strategy.
The publication also cites data from New York-based web analytics firm SimilarWeb, which claims Paytm Mall has seen a massive 88 percent drop in traffic to 5 million per month in January 2019, compared to 45 million in October 2018. Less business is likely the reason for closing down fulfilment centers across the country.
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“They (Paytm) asked us to stock a month’s inventory for December last year and now asking us to take back the inventory. They have shut the fulfilment centres at several places. We can’t return these unsold inventory back to the manufacturers now,” a Mumbai-based FMCG seller told the publication.
“Paytm stopped giving cashbacks and this has resulted in heavy losses for us as consumers have stopped buying. I was doing business worth ₹10 crore a month, but now it has come down to ₹10 lakh. They stopped cashbacks without even informing us,” another seller said.
Yet, the company’s focus on strategy seems to be constant, where it acquired NearBuy and Little, hyperlocal deal marketplaces, back in 2017 to strengthen its O2O presence.
However, Paytm founder Vijay Shekhar Sharma has however denied these allegations. “I have mentioned earlier also that we (Paytm Mall) will have a majority business by O2O category. Grocery from our store is becoming bigger and bigger,” Sharma told BusinessLine. Sharma further claimed that the GMV (gross merchandise value) of the company has grown, and Paytm has been pushing inventory of offline stores closer to customers for faster delivery. BGR India has reached out to Paytm for a comment and we will update the copy when we have a statement.
In the e-commerce space, Patym Mall is having cut-throat competition where Amazon India and Flipkart have established their dominance. Experts also believe that by getting into several businesses, from mutual funds to payments bank, and more, Paytm has lost its identity.