One 97 Communications operates Paytm, that is payment through mobile. It is a payment platform, a secure digital wallet in which one could store money and pay for services on Uber, Makemytrip etc. People put their money in Paytm wallet for mobile top ups, booking tickets or to pay for bus, auto and taxi rides. Many users come to Paytm frequently for several low-value products and services.It is a dominant wallet in the country. It has the power to disrupt. It has the potential to become the biggest application in the world with about half-a-billion users. Its customer acquisition cost is zilch since it has already 50 million users using its digital wallet.
Paytm is planning an alliance with Alibaba in China. They want to exploit the two platforms — Paytm and Alibaba/Alipay. They want to become the largest m-commerce player. Paytm customers will get access to products sold on Alibaba in other markets. Paytm is thus planning to add slices of digital commerce to its pay engine. Other e-commerce companies first built the market place and the payment engine later. Paytm to begin with starts with a base of 31,000 merchants which will expand to one lac by the end of 2015. Paytm model differs from other e-commerce operators. Paytm acquires customers for its wallet. They use the wallet for multiple things — utility payments, transfers of money, travel, tickets and now grocery. It is an open market place which connects buyers and sellers. It does not own warehouses and takes0.8 to 2.5 per cent margin per transaction. E-commerce rivals own warehouses and manage their own logistics. Paytm distinguishes itself from other e-commerce players by building a zero commission market place. In other words, the sellers on the platform do not need to give a commission to Paytm on sales. E-commerce players work on commission-based model. This model is similar to Alibaba’s Taobao which works on similar lines in China.
Paytm now clocked a gross merchandise value (GMV) of $ 1.5 billion. It aims to reach $ 4 billion by the end of 2015, and $ 10 billion GMV by 2016.
Paytm now proposes to replicate the Indian model abroad, and would like to go global. It expects to start trial operations in Singapore and West Asia by end of 2015.
75-80 per cent Paytm sales come through app or mobile phones. Paytm has tied up with Samsung, Microsoft, Micromax, Lava and Spice for pre-bundling their app on handsets of the manufacturers.
Paytm has to get 1 million Chinese merchants on its e-commerce platform and about 100 million SKUs through its tie up with Alibaba.