Going along with the future strategy of building connect with offline retailers, online marketplace Paytm is inviting marquee brands in the furniture and large appliances space. The Noida based company will give an online presence to the brands on its marketplace, but fulfillment and installation will be delivered by the brand's local franchisee.
Though, furniture and large appliances were new categories launched by marketplaces Snapdeal and Flipkart in 2015, fulfillment through offline partners continues to be in a pilot stage. The inventory-based model of fulfillment provides a margin of 40 to 60%, though it depends largely on companies working with specialised logistics partners.
ShopClues also works with a network of sellers to fulfill orders within a given region, reducing the turn-around-time. This offline-to-online strategy has also been adopted by players in the furniture vertical such as CapriCoast, FabFurnish as well as Zopper in the case of electronics and appliances.
Sudhanshu Gupta, vice-president at Paytm said that Paytm does not work with inventory and the current model in the furniture category is a 10-20% margin business. Paytm currently covers 1,400-plus pincodes and will scale to 7,000 pincodes in the coming quarter.
Amit Bagaria, vice- president at Paytm said that for large appliances and furniture business, logistics poses the biggest challenge for online commerce platforms, both from a cost and user experience point of view. Paytm resolves it through the brand's ecosystem.