Paytm Mall seems to have been harbouring lofty ambitions after receiving eBay backing. While the e-commerce marketplace has been unable to make a dent in local e-commerce space, it’s planning to launch in the Middle East.
According to Rudra Dalmia, the company is looking to build a large business in the Gulf region. It’s already testing the market in the region through a partnership with eBay. eBay has been helping the Noida-based company to offer its catalogue in the Middle East, according to a Business Insider report.
The Middle East has been a lucrative market for Chinese cross border e-commerce players such as Shein and JollyChic. The duo, along with a few others has been performing well in the region. With a high concentration of HNIs in the region, the purchasing power is quite high as compared to other markets in Asia. Hence, they spend more for convenience and access to a wide range of catalogue.
The Middle East has always had a penchant for branded and expensive products. On the contrary, Paytm Mall primarily focuses on unbranded and inexpensive products (except electronics and mobile phones). It’s not clear whether Paytm Mall would devise a different strategy for the Gulf region or not.
After raising $445 million from Alibaba and SoftBank in April last year, Paytm Mall had subsidized its shoppers through cashbacks and freebies till the end of 2018. However, the company realized that the cashback-driven strategy was flawed and couldn’t be sustained.
Early this year, the company had cut cashbacks to a large extent. Rudra also emphasized that Paytm Mall is making a marginal positive contribution, and it doesn’t sell anything, where it loses money. Recently, Paytm Mall had decided to separate all functions from its holding company One97 Communications.
eBay had invested $160 million in Paytm Mall last month at a valuation of about $3 billion. Entrackr had exclusively reported about the deal for the first time in April this year. With this investment, eBay wants to push its catalogue in India, and it seems the US-based e-commerce pioneer may use Paytm Mall in other countries as it’s doing in the Gulf region.