Paytm Mall, the online retail platform of India's biggest digital-payments brand expended nearly Rs 5 crore a day in the year ended March 2018 to gain market share as it competes with the likes of Amazon.com Inc. and the Walmart-backed Flipkart.
Paytm's e-commerce platform spent nearly Rs 2,581 crore in the 12 months through March 2018, according to filings with the Registrar of Companies that were reviewed by BloombergQuint. This comprised around Rs 944 crore on advertising and Rs 757 crore was miscellaneous expenses—including a royalty fee of Rs 405 crore and customer access expenses of Rs 307 crore.
The company reported a net loss and revenue of Rs 1,787 crore and Rs 744 crore, respectively, for the fiscal. That compares with a revenue and loss of Rs 7.35 crore and Rs 13.63 crore, respectively, the e-tailer made in the fiscal ended March 2017. That's because the company was operational for only seven months in FY17.
The e-commerce entity which in Aug. 2016 was carved out of One97 Communications Ltd.—that runs Paytm and Paytm Payments Bank—has raised over $600 million at a valuation of close to $2 billion and counts Japan's SoftBank Group Corp. and Alibaba Group Holding Ltd. as its key investors. It currently ranks a distant third in India's rapidly growing e-commerce market.
The Jack Ma-founded Alibaba Group holds a 46.09-percent stake in Paytm Mall, followed by Saif Partners which is a 18.67 percent stakeholder and SoftBank that holds about 21.13 percent, according to the filings as of Aug. 2018. Founder Vijay Shekhar Sharma owns 9.66 percent stake.
Paytm Mall had said in the run up to this year's festive season sales it earmarked a marketing budget of Rs 501 crore. It's Chief Operating Officer Amit Sinha had said to BloombergQuint early this year it plans to spend over $1 billion in two years to strengthen its technology backbone and add more sellers.
Paytm Mall—which takes inspiration from China's T Mall—is betting on the Offline to Online model, or O2O, and follows an inventory-free model, unlike its peers that rely heavily on inventory.
Meanwhile, One97 Communications reported a revenue of Rs 3,314 crore and a loss of Rs 1,604 crore for the 12 months through March 2018. Since its inception, it has raised a little over Rs 11,400 crore from investors, of which Rs 10,831 crore came in the last three years.
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