Paytm Mall to avoid bidding war with Amazon, Flipkart this festival season

New Delhi: This festival season, Paytm Mall has tweaked its strategy to get more users on its platform. The e-commerce player has decided to not engage in a bidding war during the sale period, but rather encourage users of its parent Paytm, which has a customer base of 400 million, to shop using its platform.

“We are not going to get into a bidding war with Amazon and Flipkart, where if they are selling for (Rs) 27, we’ll sell it for (Rs) 25. But what we will definitely do is give you tons of benefits which will make it affordable,” Paytm Mall Senior Vice President Srinivas Mothey said in an interview.

The company is instead using innovative strategies like offline-to-online platform, where users can go to a physical store of brands like US Polo Assn, GAP, and others and use the Paytm app to buy their products. What’s more, a user can also get cashbacks on the Paytm platform for doing the shopping if they get the code.

Mothey claims they have tied up with over 30,000 brand stores, including Big Bazaar, Croma, Shoppers Stop and Brand Factory. It also recently tied up with Arvind, which has brands like Arrow, Calvin Klein and Aeropostale. “If you walk into any mall, about 80% of the shops are with us. At 80% of these stores, you can get Paytm cashback,” Mothey said.

The need for not getting into the bidding war came from Paytm Mall’s need to not burn billions of dollars more in competing with its larger rivals Walmart-owned Flipkart and US-based Amazon Inc for the same set of customers. This comes after losses of One97 Communications Ltd, the parent of Paytm, nearly tripled to ₹4,217.20 crore in the year ended 31 March from ₹1,604.34 crore in the year-ago period.

“The market of online commerce is not growing at earlier levels. The number of shoppers is also stuck at around 80 million. If we have to compete with Amazon and Flipkart, we will have to spend another tens of billions of dollars. There is no play there. Everyone is playing the same group of customers,” Mothey said.

To reduce its cash burn as well as to expand the market, the company developed the offline-to-online model, and also changed its cashback strategy to provide more ecosystem offers, like movie and bus ticket vouchers that can be redeemed on Paytm. Also, the firm is trying to push curated products of its investor eBay, and Mothey claims that the platform is gaining traction, with per day sales of the products in four digits.

Paytm Mall expects close to $300 million in gross merchandise value in the first two waves of its sale. The first one started on Sunday and will continue till Friday, and the next wave will be held before Dussehra sale. The online retailer will also be holding sales around Dhanteras and Diwali.

Another major feature that Mothey believes will set Paytm Mall apart from its rivals is the availability of nine regional languages apart from English and Hindi. The company is also advertising its sale in regional languages instead of promoting it in English in national dailies, Mothey said.