“Consolidation is happening…it is good for the investors,” said Amit Sinha, chief operating officer of Paytm Mall.
Amidst all the news surrounding Walmart’s looming acquisition of Flipkart, its rivals are of the view that healthy competition will be a good sign for the e-commerce industry.
“Consolidation is happening…it is good for the investors,” said Amit Sinha, chief operating officer of Paytm Mall.
However, he added that while some investors will exit, many others are still going to be in the market for the long run. “Thankfully, we have investors who are very clear that they are in for the long haul,” he said.
According to data sourced from business intelligence platform Paper.vc, Flipkart’s largest investor, SoftBank, currently holds 20.79 percent stake in the firm. Tiger Global’s stake is 20.58 percent stake. Naspers, Accel and Ebay have stakes of 12.83 percent, 6.44 percent and 6.11 percent respectively.
The two founders, Sachin Bansal and Binny Bansal, reportedly have a little over 5 percent stake each in the company.
Apart from SoftBank, majority of the investors are looking forward to exiting the company post the deal.
Sinha also stressed that the e-commerce market currently is at a very nascent stage and is barely a fraction of the entire retail market of the country, which is bound to grow by leaps and bounds.According to a recent report by research firm Morgan Stanley, online retail in India is expected to grow to USD 200 billion by 2026, up from USD 15 billion in 2016.”It is very small and virtually nothing in terms of the size of the business of about USD 650 billion retail market in the country,” he said.
Talking about a potential competition with US-retail giant Walmart if it acquires Flipkart, Sinha said that Paytm Mall will continue with their differentiated strategy of O2O to fight the competition.
“Our O2O thing is very different from Walmart or Amazon,” he said adding that the company has partnered with 15 million shopkeepers in the country.
He said that instead of focusing only on the online retail market, Paytm Mall will be targeting a USD 1.1 trillion dollar retail market by 2020 with its O2O strategy. It is expected that the online retail by 2020 will be about USD 50-60 billion market.
“We firmly believe that this country needs a model which is more suited to what we are doing rather than any other single retailer because we are not a country of big box retail,” he said.
“At one point of time people were saying that the big box retail would just swipe away the shopkeepers but it hasn’t happened. And there is a reason that the shopkeepers add a lot of value to the retail ecosystem,” he added.
Paytm Mall which raised about Rs 3,000 crore from SoftBank last month, is targeting a Gross Merhandise Value (GMV) of USD 9 billion by March 2019.
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