eBay logs into Paytm Mall with 5.5 per cent stake, eyes pie of online retail

India’s fast-growing and strongly competitive online retail market has convinced eBay to buy a 5.5 per cent stake in e-commerce marketplace Paytm Mall.

However, the companies have not publicised in market the value of the transaction in a joint statement. The statement also did not say whether the agreement contains any facility for eBay to boost its shareholding in Paytm Mall in the future.

Although, source says eBay is investing US$ 165 million in the Noida-based firm, increasing the value of Paytm Mall to about US$ 3 billion from US$ 1.5-2 billion last year.

As part of the agreement, some of eBay’s supply will be made accessible on Paytm Mall, the companies said. eBay’s product will be available in Paytm Mall.

The partnership between eBay and Paytm Mall is expected to add up to competition in India’s online retail market which is for now led by Amazon.com, Walmart-owned Flipkart and Snapdeal. According to market researcher eMarketer, online retail sales in India are anticipated to grow at a double rate and become twice of US$ 71.94 billion by 2022, from US$ 32.7 billion last year. The main factors adding on growth in India’s online market include the expanding base of internet and smartphone users, and favourable demographics comprising a growing young population and a growing middle class.

Paytm Mall is run by Paytm E-Commerce pvt. ltd which is the e-commerce arm of One 97 Communications Ltd, which operates Paytm and Paytm Payments Bank. Paytm Mall stakes on the offline-to-online model (O2O), a departure from the usual inventory-led business or creation of private labels. As part of the model, orders are serviced from local brand stores, offering synergies in logistics and warehousing. These brands have their own web pages on Paytm Mall for easy access.

Paytm Mall presently is the third largest in India’s e-commerce market and competes with Flipkart and Amazon India.

eBay was founded in 1995 and is one of the world’s largest online marketplaces. In 2018, it allowed US$ 95 billion of gross merchandise value (GMV). Although, eBay has not easily entered in Indian market. Though it was one of the initial applicants, having forayed into the Indian market in 2004 and starting operations through Bazee.com that it had acquired in 2013. eBay found it difficult to hold against Flipkart and Amazon India. Two years ago, eBay sold its India operations to Flipkart, but a year later Flipkart shut down eBay.in.

Ever since then, the company has relaunched eBay.in in early January, focusing on enabling India’s small- and medium-sized businesses to sell their products to eBay’s 182 million customers around the world. The company’s focus on establishing alliances with Indian e-commerce firms.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.