Paytm Mall closes down warehouses to cut costs

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E-commerce marketplace Paytm Mall is shutting down its warehouses and adopting a hyperlocal model, which will help it comply with FDI in ecommerce norms and reduce costs associated with logistics.

NEW DELHI: E-commerce marketplace Paytm Mall is shutting down its warehouses and adopting a hyperlocal model, which will help it comply with FDI in ecommerce norms and reduce costs associated with logistics.

This will help India’s third largest e-tailer on multiple fronts. It will drastically reduce the cost as the company does not need to own and operate its own warehouses. The sellers on its platform will use local courier services for delivery, thereby bringing down the time and cost of deliveries.

“The cost of acquiring sellers has gone down as most of these sellers were already accepting payments using Paytm,” said senior VP and CFO of Paytm Mall, Rudra Dalmia.

The company, valued at around $3 billion after eBay agreed to buy a 5.5% stake in it for $165 million, is aiming to be ebitda-positive within two years. In the current financial year, Paytm Mall is eyeing a GMV of Rs 17,000 crore.

“In 2017-18 we were doing a course correction. In this business, one can only be profitable if one becomes a true marketplace and not follow an inventory-based model because the latter comes with the baggage of high costs. Both our partners, eBay and Alibaba are making money,” said Dalmia.


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