Big brand partnerships drive seller sign-ups for Alibaba-backed Paytm Mall

E-commerce major offers Samsung and others a way to get around the online/offline tug of wills

In the next four months, Alibaba-backed Paytm Mall hopes to have all 150,000 of Samsung’s authorised retailers in India on its platform. The move, it says, will help the e-commerce entity become the single largest seller of mobile telephony devices in the country, a distinction now held by rival Flipkart.

Amit Sinha, chief operating officer of Paytm Mall, says brands have so far been unable to ignore e-commerce players but at the same time had to face the wrath of their offline channels as online ones engaged in deep discounting. With Paytm Mall, the offers you see online are the same ones you get offline, he assured.

“Brands like Samsung are very concerned about the discounting. They want to control the market operating price because at the end of the day, 80% of (their) sales happen through the offline channel. Brands were getting hammered by their offline partners, who were asking them to boycott online players,” said Sinha.

Paytm Mall also partners with small offline retailers. It asks them to route purchases by customers through its platform; in return it will drive traffic from the web to their stores. The upside is that offline retailers will now be able to offer deals and discounts to compete with Flipkart and Amazon as Paytm Mall burns cash to catch its rivals.

The targets are ambitious. Paytm Mall wants the gross merchandise value (GMV) of products sold on its platform to cross $10 billion next year, a claimed three-time jump from the $3 bn in GMV during the past year. All of these will be driven through offline retailers and Paytm Mall is taking the help of brands to sign these up.

“Our pitch to Samsung was that each of their shopkeepers will be on a single platform and will be able to keep their inventory, sell through that system and we will have the same offers that are available on the online platform. Today, Samsung invites us to all their dealer and retailer meets, to come and explain what we’re doing,” added Sinha.

Paytm Mall has so far signed up 25,000 authorised retailers for Samsung devices; the number is going up. Apart from Samsung being able to keep its offline retail community happy, it gives the company the ability to monitor unsold inventory like never before and micro-manage offers across its entire channel, rather than in a few stores.

Sinha says many retailers of electronics in smaller cities and towns won’t stock high-end SKUs (Stock Keeping Units, the retail term for a number assigned to a product by a retail store to identify it and to track all the inventory). Not because these don’t sell but because they don’t sell enough of these. With Paytm Mall directing traffic to these stores and being able to fulfill orders made at one store with the inventory stored at another, brands like Samsung can augment their earnings.

While Samsung is one of the biggest integrations of a brand with Paytm Mall, it isn’t the only one. Chinese computer and smartphone maker Lenovo is also working closely with it, a partnership which helped the latter to become the largest seller of laptops in India says Sinha. 

Sinha says he is, for now, focusing on major e-commerce categories such as phones, electronics, personal computers, appliances and fashion, while not revealing many names.

“Most brands actually end up losing 30-60% of their sales after a person decides to buy a product because the right SKU is not available. It’s very pronounced for a fashion brand and less pronounced for an appliance brand. Through our single platform and large seller base, we can solve this issue. So, brands obviously see our value,” he adds.