Paytm Mall FY20 loss down 60% to Rs 479 cr over weak cashback, promotions

 E-commerce firm Paytm Mall on Friday said its loss narrowed by 60 pc to Rs 479 crore in 2019-20 on account of reduction in assortment size, cashback and promotions.

The company had posted a loss of Rs 1,171 crore in 2018-19.

"During the last fiscal year, we have streamlined business operations to improve our unit economics which has helped us in reducing losses by 60 per cent. Our efforts are to become profitable with hyperlocal outreach and initiatives which have already started giving positive results," Paytm Mall COO Abhishek Rajan was quoted as saying in a statement.

The company's total revenue for the reported financial year declined about 27 per cent to Rs 703 crore as compared to Rs 968 crore in 2018-19.

"While there has been a 27 per cent decline in revenue due to the overall reduction in assortment and categories, its hyperlocal initiative has started showing results that would lead to overall growth in the revenue over the next few quarters," the statement said.

In the last fiscal year, Paytm Mall reduced logistics costs by relying on a strong third-party network of delivery firms, the statement said.

"The company over the last several months has done a deep analysis of the overall operations and zeroed in on elements including cashbacks, promotional campaigns, that were draining resources and increasing costs," it added.

The company is promoting products that have a higher margin, it said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Paytm accuses Google of trying to dominate India's digital ecosystem

 Indian unicorn Paytm has accused Google of making policies that are over and above the laws of India after the Noida-based startup's app was briefly delisted from the Playstore last week.

The Noida-headquartered company said it had launched a campaign UPI cashback for its users on September 11. However, the company's payments app was delisted on September 18 from Playstore for policy violations without giving it an opportunity to defend itself.

"This was the first time that Google sent us a notification regarding our UPI cashback and scratch cards campaign. Contrary to accepted practice, we were not given any opportunity to respond to their concerns or put forth our views," added the company in its blog post.

Paytm suggested the global tech giant's move as hypocritical as Google, too, regularly runs similar scratch card campaigns in India under its Google Pay app.

Such moves will be familiar to all Indian internet companies since they face similar arm-twisting and fear of Google’s dominance over India’s digital ecosystem every day, Paytm added.

"Google owns Android which is the operating system on which over 95 per cent of smartphones in India run. Google, as a result, has enormous control over which apps you download through its Play Store policies. It also makes billions of dollars in advertising revenues from the Indian startups that make these apps," the company said.

ALSO READ: Paytm returns hours after Play Store exit over alleged policy violation

A Google spokesperson said on Sunday evening, "Offering cashbacks and vouchers alone do not constitute a violation of our Google Play gambling policies. Last week we reiterated our Play Store gambling policies. Our policies don’t allow online casinos or support any unregulated gambling apps that facilitate sports betting, including daily fantasy sports in India. We enforce our policies very thoughtfully to provide a safe and secure experience for consumers, while also giving developers the platform and tools they need to build sustainable businesses. In the case of repeated policy violations, we may take more serious action which may include terminating Google Play Developer accounts. Our policies are applied and enforced on all developers consistently."

Regarding the controversy of Paytm First Games being promoted through the Paytm app, the firm said it had received communication from Google’s support team sharing their concerns on August 20, August 28 and September 1.

"While we strenuously disagreed with the allegation that we are breaching the policy, we immediately complied with the diktat that barred us from promoting our gaming subsidiary. We wish to make it clear that driving traffic or promoting fantasy sports is not gambling," the company added.

Sachin Tendulkar pads up as brand ambassador for Paytm First Games

 Digital payments company Paytm said that its gaming subsidiary Paytm First Games (PFG) has roped in cricket legend Sachin Tendulkar as the brand ambassador. Tendulkar would be instrumental in creating awareness about the genre of fantasy sports in the country. Other than ‘fantasy cricket’ he would help PFG also promote other sports including kabaddi, football, and basketball. The firm said the partnership with Tendulkar will increase its reach in smaller cities and towns. PFG’s parent company Paytm is India's highest-valued unicorn, at $16 billion.

“Cricket is an engaging sport, and we all tend to have opinions about the game – right from player selection to playing strategies. Paytm First Games will give fans the opportunity to don their thinking hats and experience the thrill of making the correct choices and getting their teams to win,” said Sachin Tendulkar. “I am happy to partner with Paytm First Games to enable cricket fans to engage more with the ever-popular game of cricket.”

“Sachin (Tendulkar) is the pride of our country and the true embodiment of excellence, tenacity, and hard work,” said Vijay Shekhar Sharma, founder and CEO of Paytm. “This association is based on many of the values we share with the greatest sportsperson of all time.”

PFG has also set aside Rs 300 crore for investing in growing the market for fantasy sports and other online gaming events during this financial year. It said that over the next six months, 200 plus live events would be featured on the platform including international and domestic cricket tournaments and soccer leagues.

"As India’s homegrown gaming platform, our vision is to get the sports fans closer to the action with fantasy sports,” said Sudhanshu Gupta, chief operating officer, Paytm First Games. “Most of us have grown up watching (Tendulkar) in action. With Sachin (Tendulkar) as a brand ambassador, we wish to inspire mobile gaming enthusiasts to experience fantasy sports which are about tactics, strategic planning and research."

PFG said it offers over 50 games, where players apply research and strategy to engage with live sporting events. The platform currently engages with over 80 million gaming enthusiasts with the majority of them from smaller cities and towns. The firm said it is aiming to reach 100 million users in the upcoming T20 league.

Paytm, CEO Sharma to acquire Mumbai-based general insurer Raheja QBE

Paytm and its CEO Vijay Shekhar Sharma will acquire Raheja QBE, a Mumbai-based private sector general insurer, for an undisclosed amount to expand the digital payments company's financial services.
Raheja QBE will be acquired through QorQl Pvt. Ltd, a technology company in which Sharma has majority shareholding. Paytm will hold rest of the insurer.

The acquisition is subject to customary conditions, including, approval from the Insurance Regulatory and Development Authority of India (IRDAI).
"It is an important milestone in Paytm’s financial services journey, and we are very excited to welcome Raheja QBE General Insurance into the Paytm family. Its strong management team will help us accelerate our journey of taking insurance to the large population of India with the aim to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products,” said Paytm president Amit Nayyar.
Raheja QBE, which started operations in 2009, is a joint venture between Prism Johnson Limited and QBE Insurance Group, one of Australia’s largest insurers. Raheja QBE employees would continue working in Mumbai and other places, said the company.
"We are happy to announce the sale transaction of our entire 51 percent stake in Raheja QBE General Insurance Company Limited. Our decision to sell our stake in Raheja QBE is in line with our mission to create sustainable shareholder value and will enable us to focus our resources on our core businesses. This move will help the insurance business scale up to new heights by leveraging the large customer base and innovative products offered by Paytm," said Vijay Aggarwal, Managing Director Prism Johnson Ltd.
Paytm company plans to leverage its consumer base and merchant ecosystem to innovate insurance products and services.

Warren Buffett's Berkshire Hathaway closes $300 million investment in Paytm

One97 Communications, the parent entity of India’s largest digital payments firm, Paytm, has received $300 million (Rs 21.79 billion) in fresh funding from Berkshire Hathaway Inc. The deal is the Warren Buffett-led firm’s first investment in the country.
According to regulatory filings sourced from Paper.vc, One97 Communications issued 1.7 million shares to BH International Holdings on September 27. Post the investment, Berkshire Hathaway will have around 2.9 per cent holding in the Indian firm.

Paytm’s value post the investment will stand at Rs 731 billion ($10 billion).
Earlier this month, Berkshire Hathaway had confirmed it was investing in Paytm, but clarified that Buffett himself wasn't involved in making the deal. The investment is yet to be officially announced by either Berkshire Hathaway or Paytm.
“We feel both excited and humbled by this endorsement. Berkshire’s experience in financial services, and long-term investment horizon is going to be a huge advantage in Paytm’s journey of bringing 500 million Indians to the mainstream economy through financial inclusion,” Paytm boss Vijay Shekhar Sharma had said in a statement soon after.
The investment comes at a time when Paytm is going up against global giants Google and Facebook-owned WhatsApp. Both the US giants have either launched or are in the process of launching their digital payment products built on top of India’s indigenous payment system UPI.
Google Pay (previously Google Tez) is already one among the most used UPI payment apps in the country. In August, the Mountain View company said its payment app had been downloaded over 50 million times in India. WhatsApp continues to await the go-ahead from RBI to launch its UPI service beyond the one million beta users who already have access to it.
The Facebook-owned instant messaging app has over 200 million monthly active users in India already, and experts say with such a large user base, it could really disrupt other large players in the market. Sharma has been quite vocal in his opposition to these global players, even calling Facebook the most evil company in the world.
The other large backers of Paytm include China’s e-commerce giant Alibaba and Japan’s Softbank, both of which have pumped in billions into the digital payments firm. Alibaba has also made a separate investment into Paytm Mall, which is the e-commerce subsidiary of the Sharma-led company.

Paytm valuation pegged at $10 bn after employees sell shares worth $50 mn

Some former and existing employees of Paytm are likely to sell shares worth about $50 million to new investors, according to industry sources.
The secondary share sale, which is expected to take place over the next few weeks, would see new investors like Discovery Capital coming on board, the sources said.
They did not wish to be named as the matters are private.
When contacted, a Paytm spokesperson declined to comment.
The sources said the transaction -- when completed -- could hike the valuation of the Alibaba and SoftBank-backed firm to about $10 billion.
In May last year, Paytm had raised $1.4 billion from SoftBank, which valued the company at $7 billion at that time.
Paytm has been one of the prominent beneficiaries of the government's move to scrap high denomination notes in 2016.
It has seen manifold growth in transactions on its platform as well as expansion in the number of users since then.