This comes after eBay picked up a 5.5% stake in Paytm Mall for $160 million.

Paytm Mall separates all functions from parent entity makes changes to biz strategy
Atom E-commerce Wednesday, August 14, 2019 - 10:18

One97 Communications is the company that owns Paytm Mall and other entities that use the Paytm brand. The ecommerce platform is now reinventing itself by severing direct functional links with the owner company, reports Economic Times. This  means none of the back-end operations will have staff on the rolls of One97 Communications running any function in Paytm Mall. It will be an independent entity with all functions being managed on its own.

Though the purpose or the reason behind this move is not clear the changes have come about after the recent partnership Paytm Mall entered into with eBay. The US based ecommerce firm paid $160 million to pick up a 5.5% stake in Paytm Mall. The business, promoted by Vijay Shekar Sharma is being ‘rebuilt’, according to the CFO of Paytm Mall, Rudra Dalmia.

Besides the entering of eBay and launching of a dedicated international store within the Paytm Mall platform, the other recent changes include new partnerships entered into with the Future Group, Reliance Industries and BigBasket for its offline-to-online (O2O) business.

These changes have further expanded the products and categories that could be ordered on the Paytm Mall, from movie tickets to groceries and fresh foods.

Paytm has had no difficulty with raising funds for its operations. It managed to raise over $650 million from such marquee investors like Alibaba, SoftBank and SAIF Partners. These investors have come up with follow on investments during this period of two years.

A major shift in the company’s strategy in the past few months has been to cut down on the cash burn and to close down those areas which were leading to high losses. It aims to turn EBITDA positive within 2 years by solving its logistic costs through an O2O (Online-to-Offline) model, where sourcing and delivery are done by local retailers.

According to the company, logistics is the largest contributor to overheads and accounts upwards of 30% cost of operations for any e-commerce company in India.

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