INSUBCONTINENT EXCLUSIVE:
India's online retail industry has been in turmoil since the government implemented stringent new rules to rein in major players like
and Walmart Inc.'s Flipkart
Amid the uproar, Vijay Shekhar Sharma -- whose two-year-old Paytm Mall is backed by Alibaba Group Holding Ltd
-- is quietly devising ways to outstrip his rivals.The new regime forbids retailers from holding any business interest in online merchants
on their websites, exclusive arrangements and deep discounts -- forcing Amazon and Flipkart to redraw contracts and rescue thousands of
product listings that vanished overnight
The founder of Paytm Mall operator Paytm E-commerce Pvt, an affiliate of India's largest digital payments provider, spoke in an interview
this week about how his business stands to gain.What's been the impact of the regulations on your businessThe new rules require more
stringent adherence by e-commerce marketplaces
For some of us who have been compliant all along, this gives us an opportunity to consolidate the business while rivals are otherwise busy
It's attracting to our marketplace those partners and sellers who were fighting online retailers that skirted rules and threw money in the
We've become a far stronger player.How's Paytm Mall doingOur cash burn has come down
We have just turned net contribution positive
We are now at $3 billion GMV (Gross Merchandise Value) annually.Our focus is on growing the market by converting offline partners to online
That way we are bringing newer users to transact on the app
Getting users to shop through our app has become our most important performance indicator.How are you doing thatWe are primarily an Offline
to Online, an O2O platform
Instead of having unorganized online sellers on our platform, it's better to get organized offline sellers to come online
So we are bringing stores and shopkeepers from the physical world to sell online
We are strictly about quality and select cross-border items.We have three categories of app users: buyers visiting offline stores and not
finding the size, color or variation and going online on our app to place an order
Stores shipping directly to buyers through our app
And stores buying wholesale from our platform for sellers.What kind of retailers are you signing upWe have cracked a deal with Kishore
Biyani of Future Retail and we bring a huge amount of traffic to his online store
Similarly, we have deals with Tata's Croma stores and Reliance Retail
We have every kind of retailer from small neighborhood stores to large chains.How will the new rules affect others like Amazon and
FlipkartIn order to follow the rules in intent and spirit, their models will require a fundamental change
Right now they are finding workarounds
We are happy that the marketplace model prevails
The government's made its intentions more than clear -- it does not want those with foreign investors to do multi-brand retail
It doesn't want them to influence pricing
It doesn't want them dumping money in the form of discounts
All of this has been the playbook of many players
The new clarifications make it amply clear that their model has to change.Amazon is said to be in discussions to invest in Future Retail.We
have had no equity sale discussions with Future.(Except for the headline, this story has not been edited by TheIndianSubcontinent staff and
is published from a syndicated feed.)
