Of India’s Changing Ecomm Landscape And Why Paytm Is Better Off Selling Its Marketplace

For Paytm, it’s clear that the wallet business is the NextBigWhat – and ecommerce marketplace, to me was more of an interim solution to keep the valuation flying.

Now that every Indian ecommerce players have played their card, the biggies like Alibaba, raukaten are turning their focus on India (Alibaba is exploring partnership with Tatas, Rakuten too is planning to launch in India).

What about the Indian players?
Flipkart and others are still in a figuring out mode (okay, that’s over simplification). Both Flipkart and Snapdeal are figuring out the core and will start taking tough decisions in the coming weeks (translates to shutting down categories).

But, what about Paytm?

I think they are totally killing it.

With wallet.

With recharge.

But not with ecommerce marketplace.

I am not talking about GMV growth, but purely the product focus.

Paytm’s MOAT
Paytm is not really a master of logistics or even the marketplace business. Infact, not even close to that! Paytm is largely a technology (integration) play which has strong wallet penetration (+ bank license) to go for the kill.

Case in point : Marketplace without reviews? Do you know that there is no way you can review products on Paytm!! Yeah – you can review a seller but not a product ! So much so for marketplace philosophy!

In an ideal world, you can focus on every piece of the puzzle (and win the world). But in real world, it hardly works.

For Paytm, it’s clear that the wallet business is the NextBigWhat – and ecommerce marketplace, to me was more of an interim solution to keep the valuation flying.

And anyways, why focus on a smaller market (where everyone is bleeding) when you actually win the world (with wallet/bank)?

Why Paytm should sell off its marketplace?

Simply put. It’s not the focus area.

Paytm has very little skin in the game when it comes to marketplace business.

There are buyers who are willing to enter the Indian market and would be willing to buy Paytm’s marketplace business.

The more you delay, the more you expose your ‘lack of focus’ on the product!

As they say, #PaytmKaro.

  1. Paytm Karo- i used to make recharges, online purchase, retail shop purchase, cab payments, etc etc now the biggest thing is i can buy petrol from my wallet, wow and i get a cash back too so why should i carry cash so Paytm Karo

  2. Distribution yes. But maybe just distribution is not enough to ensure that users prefer Paytm over others.

  3. Wallet business is difficult to crack. Unless entire India adopts PayTM and frauds are reduced by 10 X, there will be no love from investors.

    True marketplace is not PayTM’s forte and it doesn’t intend it to be. Marketplace (earlier with recharge) is only a way to acquire customers and get them to use PayTM. With cashback, wallet’s use will increase and marketplace’s GMV will increase. Initially marketplace GMV gets them dollars from VC, at the right time PayTM will junk marketplace.

    Whenever merger of top 3 happens (it eventually will be Amazon vs Alibaba rt?) PayTM will always be in a formidable position because of its wallet. In the trio, no merger is a good merger without PayTM!!

  4. It was very useful for me.keep sharing such ideas in the future as well.this was actually what i was looking for,and i am glad to came here you keep up the fantastic work!my weblog..

  5. Paytm always had payments at its core. At the same time, it also has consciously invested in companies like Jugnoo,Little,Loginext,its own market place and may be more to come. A range of transactional plays where it can define a unique experience leveraging the wallet. This builds defensibility around wallet. Right ?

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