Alibaba Group Holding Limited is a Chinese e-commerce company that provides C2C, B2C and B2B sales services via web portals. It also provides electronic payment services, a shopping search engine and data-centric cloud computing services. While Paytm is an Indian e-commerce website headquartered in Noida, India. It was launched in 2010 and is owned by One97 Communications. The firm started by offering mobile recharging, adding bill payment and e-commerce, with products similar to businesses such as Flipkart, Amazon.com, Snapdeal. In 2015, it further added booking bus travel. Paytm also launched movie ticket booking by partnering with Cinépolis in the year 2016.
Now both the firms have come together to help Indian sellers source about 5 million products from China at cheaper rates as well as help them with logistics and payments.
While the company has already started sourcing products under the fashion accessory category on a pilot basis, it plans to add mobile accessories and home decor products to the list. Besides connecting Indian sellers with “trusted larger suppliers from China”, Paytm also seeks to offer logistics. The firm will offer these sellers support of bonded warehouses in India and consolidation centers at the source country. The programme plans to get on board at least 10,000 merchants by the end of this year, giving them access to more than 5-million products from China.
Bhushan Patil, who is heading the initiative for Paytm said
“Inventory is the third pillar of commerce, after logistics and payments, which requires optimization in India.”
The news comes at a time when e-commerce marketplaces and sellers are having quite a frictional relationship. Very recently, revolting against Flipkart’s new return policy, a small group of merchants threatened to exit the marketplace. Moreover, online marketplaces are allegedly said to be making unilateral decisions, worrying sellers. Commission changes, non-transparent communication, and reconciliation seem to be some of the worries for online sellers. Hence, this move was the need of the hour.
Bhushan Patil said
“We expect the Indian SME’s cost to come down three times with our direct connect. Most SMEs don’t import directly, they import from local distributors, and there may be 2-3 steps shuffling, we connect directly. We also offer bonded warehousing facilities, leveraging our tie-ups with import houses and trusted payments with our partnership with Citibank, which further reduces costs at scale.”
Hopefully this initiative will get rid of the friction, help Indian sellers and also cut down on expenditure.