- eBay’s global inventory will be available to over 130 million active users on Paytm mall.
- Founder Vijay Shekhar Sharma confirmed the investment but did not disclose the details.
US-based online retailer eBay Inc. is investing in Vijay Shekhar Sharma-led Paytm Mall to obtain a 5.5 percent stake, the two businesses said on Thursday.
According to the sources acquainted with the development of the deal, the contract scope is pegged at a little over $150 million and will value the Noida-based business, supported by China’s internet trade multinational Alibaba and Japan’s Softbank, near to $3 billion.
As part of the agreement, the worldwide inventory of eBay will be accessible to over 130 million active users at the Paytm Mall of Vijay Shekhar Sharma and the Paytm app ecosystem. The deal was verified by Paytm CEO Vijay Shekhar Sharma, but all the details were not disclosed.
eBay earlier invested in Snapdeal and Flipkart before Paytm Mall:
eBay invested in competitor Snapdeal and Flipkart before investing in Paytm Mall. While eBay first went to India with the purchase of Bazee.com in 2004, it struggled to create an impact at a moment when the national eCommerce sector was worth just $20 million.
It is learned that while it still holds shares in Snapdeal, it has chosen to sell its $1.1 billion interest in Flipkart following the US-based Walmart takeover of the company in 2018.
Flipkart and Amazon’s entry only made it worse. After entering Snapdeal and Flipkart-earning the former a loss of $61 million and Walmart-backed Flipkart a profit of $167 million, it is now looking to re-enter India. The retailer took a Paytm Mall board observation position but will proceed to run its e-commerce gateway in India.
Vijay Shekhar Sharma- The Happy Founder:
This investment is a strong tribute to our turnaround, and a fresh group of buyers validate the shopkeeper trade model,” said Paytm’s CEO, V S Sharma. This project is shifting from a discounting-and cashback-led approach to an online-to-offline (O2O) system on the heels of the important reorganization of Paytm Mall’s company.”
To explain this change in policy, Sharma said earlier that while most of the country’s products have been well-distributed across thousands of cities and towns, internet merchant warehouse inventory is focused in top 20 to 30 cities. Of course, the change has paid off. In April, Paytm Mall announced over the previous six months a development pace of more than 200 percent for its O2O company.
What eBay plans:
According to eBay, its worldwide inventory, which according to Sharma has more than one million distinctive international products, will be accessible to over 130 million active users on the Paytm Mall and Paytm’s app ecosystem as part of the agreement. In the next few months, catalog inclusion is anticipated to be full and will increase cross-border trade. In general, Sharma predicts that cross-border company accounts for about 10-15% of the general revenues of Paytm Mall over the next year.
Paytm Mall Recent Funding:
Paytm Mall last raised Rs 1,510 crore in a round organized by SoftBank and Alibaba in June last year, according to statutory filings, at an estimate of about Rs 12,696 crore.
With this investment[ eBay] and our current burning structure of less than Rs 40 crore per month, we have more than four years of capital,” added Sharma.
It is reported that Paytm Mall finished Rs 13,000 crore in the last financial year and is now pursuing Rs 17,000 crore in gross merchandise price.
The development takes place previously this year in the midst of accounts of a leadership shakeout at Paytm Mall. The firm tried to revamp the business that late saw hard competition from larger competitors like Flipkart and Amazon.
Meanwhile, eBay is anticipated to remain its e-commerce channel in India, even as it has invested in the business.
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