Paytm seeks profitability; will invest Rs 100 crores to achieve the target

Editor | Sep 10, 2020

As anticipated last year, more and more etailers are making the year 2015 all about focusing on profitability and letting go of discount model. Whether it is Myntra, Flipkart, Shopclues or other ecommerce players, all are determined to reach their goals. Paytm is out with their plans to achieve profitability too and reach the deepest corners of India.

How they plan to do it

Paytm is turning out to be the dark horse of the ecommerce race that’s suddenly on the forefront after lying dormant for last few years. Owned by One97 communications, the five year old company has big plans to race past ecommerce giants Flipkart, Snapdeal and Amazon.

The online player plans to offer unique products to its users, get more sellers on board and focus on building a sustainable business rather than burning investors’ money. Speaking about the company’s distinct model, Paytm’s founder, Vijay Shekhar Sharma said, “Our model is unique – tailored on the lines of Alibaba, where we provide a neutral marketplace, enabling merchants to directly deliver to consumers. We don’t ask merchants to put their inventory in our warehouse. Unlike Amazon, we don’t have any warehouses.”

This revival can be credited to the camaraderie shared between Alibaba’s Jack Ma and Paytm’s Vijay Sharma. The founder shared, “Discounts are not sustainable and we can’t keep burning money forever. I want to build a profitable company.”

100 crore investment to build strong delivery network

Last mile delivery has always been a thorn in smooth delivery process. Paytm plans to tackle that by investing a whopping 100 crore this year to strengthen their logistics and delivery arm. How you wonder? By tying with local courier companies and India Post, which will help them to maneuver their way even to the farthest towns of India.

Sharma said, “We have already covered 30,000-odd pin codes as part of the network, offering one of the widest networks in the ecommerce space. We will be able to scale up business in Tier-2 and -3 cities and towns, as well as service the remotest corner in the north-east and south to provide last-mile connectivity.”

Paytm is moving in the right direction. The company’s founder is focused on spending funds correctly, hiring right people, empowering sellers and offering unique products. They are clear about adopting strategies that offers long term benefits rather than resorting to gimmicks that get immediate attention but are not sustainable in the long run.


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