Wednesday 14 October 2015

Paytm’s ecommerce platform ‘Virtual China Bazaar’ to challenge Indian Online Sellers

Indian ecommerce sellers could be bracing themselves for some challenging times ahead, as online marketplace, Paytm is planning to release over 10 crore China made products through its latest ‘Virtual Chinese Bazaar’ platform which has prices as low as Rs. 3. Yes you read it correctly.

Strong Alibaba influence

Ecommerce global giant Alibaba recently became the largest shareholder in Paytm. Paytm has now set a long term goal to rule the Indian ecommerce market and money is clearly no object. The ecommerce platform is planning to invest $600 million over the next three years in bringing on board thousands of Alibaba’s Chinese sellers which include Tmall, Ali Expressand TaoBao. The company aims to generate revenues in the region of $700-800 million in the next 36 months.

Paytm plans to invest in:

  • Improving technology
  • Marketing Chinese products
  • Building trust among buyers
“Together (with Alibaba), we can build the truest commerce powerhouse for the country. India’s ecommerce might be getting ready for a price war at a different level.” said Vijay Shekhar Sharma, founder of Paytm.

Bitter pill for Indian sellers to swallow

The announcement by Paytm is sure to capture the imagination of the Indian consumers as they will be able to gain wider access to Chinese products at an extremely low rate, although the crux of the matter remains that the penetration pricing strategy could endanger the Indian seller who may be left with a bitter pill to swallow. To put things in perspective, China’s production machine globally now accounts for 60% of shoe manufacturing, 70% of the mobile phone handset industry and an even bigger 80% of the air-conditioning market.

What is the answer?

Paytm’s open-market style strategy is bound to ruffle a few feathers, but just as the local kirana shops did not collapse over night with the advent of ecommerce, there is sure to be a strong competitive response from Indian online sellers to protect its market. Maybe regulatory policies could help? As the Indian Online Seller community we would like to hear your thoughts on the subject.

2 comments: