“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett
The world of investing can be a mixed bag. At times, it is exciting, overwhelming yet a tad bit scary all at the same time. You must have heard the quote, “Make hay when the sun shines”, the quote seems to be tailor-made for investors. Astute research rather than just listening to popular opinion also matters a lot. If we have a look at the Indian market, the sun is shining brighter than ever over the eCommerce industry.
With so many eCommerce portals and companies looking to grab their share out of the vast Indian eCommerce market, Paytm has some huge plans to invest. According to Vijay Shekhar Sharma, founder of Paytm, the company will be investing heavily in the Indian eCommerce market. Paytm will be investing close to INR 5000 Crore in the eCommerce industry. If you look at the tick of the things, Paytm has been targeting the tier-II & tier-III cities aggressively. With the planned investment, the company will be looking to further firm their feet into the eCommerce market. Being experiential and innovative, Paytm carries the mobile advantage with them. Along with tying up with more than 30 large and medium local delivery companies and expanding their marketing budget, Paytm is looking to go huge in the coming months. The company has also been spending heavily on the traditional and sports focused platforms. Recently, the company title sponsored the India-South Africa series to gain immense exposure and reach. The company is also planning to offer 100 percent cashback on 25 million+ products for the Diwali sale. The huge investment will be saturated over a period of 3 years. Post 3 years, the Paytm will be playing host to more than 1 million sellers on their platform. Along with the investment, Vijay Shekhar Sharma is also looking to bring more than 50 Crore Indians in the mainstream economy through the eCommerce channels. Close on the heels of VC investment of $680 million in September, the total valuation of Paytm has touched $2.5 Billion. Playing a pivotal part in their plans is the inclusion of more than 1 Lakh Chinese sellers on the platform. The numbers will be achieved via Alibaba’s innovative business model. The process will be a hybrid mix of mobile-based commerce (mCommerce), digital payment solutions and banking and investment services. The advantage which Paytm has, over Flipkart, Amazon and Snapdeal is their reach over mobile Internet users, and a solid wallet offering, which these three big guns don’t have.
In conversation with Financial Times, Mr. Sharma said, “We believe that we’ll be able to bring half a billion Indians into the mainstream of the economy. Alibaba have done it in China, and with their help we can do it here.” The Paytm founder further added, “We do not have investors seeking an exit, so we can play the long game. While these three companies [Amazon, Flipkart and Snapdeal] are fighting over who can sell the most smartphones, we will have a different model.” Speaking about replicating Alibaba’s innovative model, Mr. Sharma concluded, “Jack [Ma] had said that when you find a spice trader from India and give them a new market in India online, and then Alibaba can extend the world market to them, then we will have it sorted.”