Online retailer and payments bank Paytm will not think about profits until it establishes a large enough customer base who will drive a large number of transactions, according to chief executive officer Vijay Shekhar Sharma.
“Profitability is out of the window and out of the question”, said Sharma in an interview to Bloomberg. Paytm, a unit of One97 Communications Ltd., is looking to open 500 million customer accounts on its platform by 2020, and it will only start looking at profits after that is achieved, he added.
Vijay Shekhar Sharma and Paytm have been among the beneficiaries of Prime Minister Narendra Modi's demonetisation initiative, which resulted in a jump in digital transactions across the country. From being an e-wallet then, the company has now started operations as a payments bank approved by the Reserve Bank of India.
Sharma said that the Indian industry is maturing to the point where ecosystems compete rather than companies. He noted three ecosystems in India – Paytm, backed by China's Alibaba Group Holding Ltd., and billionnaire Mayasoshi Son's SoftBank Group Corp., Jeff Bezos' Amazon Inc. with all its services and content, and Naspers Ltd.-Tencent Holdings Ltd. currently invested in Flipkart Ltd. and MakeMyTrip Ltd.
He added that the “overheating” in the market due to increased competition is an outcome of "overpaying”. For the CEO, the winning mantra is increasing the customer base and adding more cohorts, rather than just pumping in more money. “If you're planning to win by throwing in more money, then the winning race is already ended”, he said.
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