Paytm to invest Rs 500 crore to prepare for Diwali rush

Editor | Sep 10, 2020

Very recently Paytm announced ambitious plans to become profitable by 2017. They have also launched platforms such as gobig to help merchants sell online. This year Paytm managed to scale up their operations with the investment from Chinese ecommerce giant Alibaba, who are experienced with dealing with large online orders on special occasions, such as singles day.

During Diwali last year, the major ecommerce companies such as Snapdeal and Flipkart faced several challenges due to the massive spike in sales around the festive period.

  • Customers voiced their dissatisfaction on social media after not being able to place their orders successfully.
  • Logistics companies were not able to deliver on time.
  • VAT and sales tax issues led to delays in order delivery and order cancellations.

Paytm plans to avoid issues such as sold-out stocks and misplaced orders, by investing 500 crores in marketing and logistics.

“On an average, we do around 1.5 million digital and physical process transactions per day. We expect to go up by two- to- three times in the coming days,” said Saurabh Vashishtha, VP, business, Paytm.

What is the investment earmarked for?

  • Improving Software and hardware for logistics partners
  • Training sellers to handle sudden jump in sales
  • Cash back offers to website customers, in the form of services such as taxi rides
  • Increasing the advertising budget for ecommerce division

Benefit for online sellers

Paytm plans to provide an incentive for merchants by offering a subsidy on warehouse costs. The ecommerce company also aims to introduce new product lines such as appliances and ethnic wear which have been in demand during the shopping festive period. This will give more online sellers the opportunity to sell to a potential wider audience.

Having learned from the lessons of last year, do you think ecommerce companies will run their operations more effectively this festive period?


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