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Report Shows Paytm Mall Is Planning To Cut Down Its B2C Business. See Why

| Published on January 25, 2019

Big cashbacks on Paytm Mall may become a thing of past as the venture has been affected by its cashback service and is “very close” to scaling down its B2C (business-to-consumer) business, as per a report. “Its key backers, Alibaba and SoftBank have realised that cashback-driven commerce is going nowhere,” sources were quoted saying. The report added Paytm Mall has now decided to focus on B2B (business-to-business) service.

“Paytm Mall has been failing to find volumes as well as unit economics in the consumer-facing e-commerce segment. Ultimately, its key backers, Alibaba and SoftBank have realised that cashback driven commerce is going nowhere. Now they find no merit in concentrating effort and capital on it,” read Entracker’s article on the condition of anonymity.

Report Shows Paytm Mall Is Planning To Cut Down Its B2C Business. See Why
Source

Sources also reveal that Amit Sinha who was heading the Paytm Mall business has moved to look after the insurance vertical at Paytm. One97 Communication started Paytm Mall in 2016 which took very less time to become a Unicorn. It was achieved on the cashback model of Paytm itself, a strategy that failed to work for Paytm mall.

According to a Mint report, Paytm Mall had spent Rs 500 crore alone on cashbacks during the festive season. Also, it had a monthly burn of about Rs 170 crore between April to July, which adds up to Rs 680 crore worth expenses during the 4 month period.

Report Shows Paytm Mall Is Planning To Cut Down Its B2C Business. See Why
Source

Paytm Mall had a loss of Rs 1,787 crore in FY 2018 as per RoC documents. As the current market is dominated by Amazon and Flipkart, Paytm Mall found it difficult to sustain growth.

Snapdeal has bounced back by pushing its focus on unorganized retail and long tail. Experts believe that gradually it’s reclaiming the third spot in Indian e-commerce segment.

ShopClues, on the other hand, has been going through a very tough phase and appears to be out of the game.

The failure of Paytm Mall in B2C segment will raise questions on the strategy of Alibaba in India. The company had first invested on Snapdeal and then concentrated on Paytm Mall.

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