Paytm to invest Rs 100cr in cloud to expand reach to the remotest

Mobile payments and commerce venture Paytm is investing Rs 100 crore over the next year to set up a strong cloud network through local regional courier companies, as well as leverage India Post, to tackle last-mile delivery issues across the country.
Paytm to invest Rs 100cr in cloud to expand reach to the remotest
Mobile payments and commerce venture Paytm is investing Rs 100 crore over the next year to set up a strong cloud network through local regional courier companies, as well as leverage India Post, to tackle last-mile delivery issues across the country.
Paytm - which aims to nearly triple its GMV (gross merchandise value) run rate to Rs 25,000 crore by the year-end from the existing Rs 9,000 crore - plans to ship orders to 39,000 remotest pin codes through its logistics cloud platform, covering almost the entire country, Paytm founder and CEO Vijay Shekhar Sharma told TOI.
"We have already covered 30,000-odd pin codes as part of the network, offering one of the widest networks in the e-commerce space. We will be able to scale up business in Tier-2 and -3 cities and towns, as well as service the remotest corner in the north-east and south to provide last-mile connectivity," he said. He added that, at present, most e-commerce companies typically cover 15,000 to 20,000 pin codes.
Paytm distributes only 5% of its orders in the east, while only 17% of the west is serviced. A bulk of the orders, around 46%, comes from the north, followed by the south at 32%. The courier companies are not connected physically, but through a mobile and mobile app. Hence, they are linked through technology on a cloud network. Paytm will bear the cost of providing the software, mobiles, mobile application and cloud service to the small courier companies, and help them to become tech-savvy.
With the logistics cloud, Paytm will connect merchants to a network of courier partners, thereby allowing them to reach to 39,000 pin codes by the end of quarter.
Paytm claims to have on board 50,000 merchants on the platform with 12 million SKUs, while a majority of its orders are for unstructured categories like fashion and home furnishing. As against this, other e-commerce biggies have an electronic-led GMV.
"Recently, we had one of the highest orders of over Rs 2 lakh for gym equipment," he said.
"Our model is unique - tailored on the lines of Alibaba, where we provide a neutral marketplace, enabling merchants to directly deliver to consumers. We don't ask merchants to put their inventory in our warehouse. Unlike Amazon, we don't have any warehouses," Sharma explained. He added, "We work with logistics partners like GoJavas and Blue Dart."
Also, only 5% of our online transactions are cash-on-delivery, rest is through the mobile wallet, he said. Paytm rivals have an average of 60% orders, which are cash-on-delivery.
As part of the network, it is setting up SEED centres (Speedy Express Efficient Delivery), which will enable them to consolidate shipments from a network and route to specific courier partners, and reduce the last-mile delivery timelines. At a later stage, fulfillment centres, which will strengthen quality checks and further reduce shipping time, will also be added.
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