Mobile payments and m-commerce company Paytm crossed a billion dollars in revenue run rate in February. Its Chairman and MD Vijay Shekhar Sharma talks with Goutam Das about Paytm's rapid growth since it was set up and Chinese giant Alibaba's investment into the company. Excerpts:
Q. What does Alibaba's ownership (25 per cent stake) mean for your company?
A. Since Alibaba's investment, we have more money, more learning of scale. In Indian e-commerce, nobody is a marketplace apart from eBay. Everybody owns inventory. We are a 100 per cent marketplace model. We learnt that, to build scale, you have to partner with merchants. Paytm's business model is acquiring customers for wallet and creating use cases. Some of the use cases are top-up, utility payments, tickets, deals, shopping, fashion, etc. That's why we call ourselves a commerce platform, not just a payments platform. We started getting into m-commerce in April last year . Good companies grow their business model to the next level. We grew from top-ups to payments to the marketplace. Our success was that we created more use cases for customers than anybody else could.
Everybody else was waiting for merchants to create use cases. Why will you open a mobile wallet if there is no need for it? I tell you that the recharge will be easy, the DTH [direct-to-home] top-up will be easy, the Uber payment will be easy. When we were around Diwali, around October 2014, we were running on half-a-billion dollars of run rate. We have now crossed a billion dollars. We have achieved this growth in less than a year's time.
Q. What has been your biggest learning in the past three years?
A. If your customers love your product, you don't need the marketing dollars, discounting. It is a clichéd statement, but if companies start to get into the curve where your customers are your ambassadors, it is an incredible state to reach. You should only aspire for that.
Q. How has been your experience in fundraising?
A. Fundraising might be tough, it might take more time. But you should not take money from an investor till the time you have an incredible chemistry with him. If the chemistry is right, the pursuit of the objective is manyfold better. You have to discover your best partner, not hot money.
Q. What does Jack Ma (Alibaba's Founder and Executive Chairman) expect?
A. There is no better thing than having Jack Ma as a mentor. He spent time with our team. He listens to our story and tells us how we have to build a company for our next generations and not on a single opportunity. Jack Ma comes in as a champion of the cause here.