Early investors Alibaba, Ant exit Paytm Mall

E-commerce venture decides to pivot to ONDC, exports

Early investors Alibaba and Ant Group have exited Paytm’s e-commerce venture, Paytm Mall, even as the company announced a pivot to the Open Network for Digital Commerce (ONDC) and said it will explore export opportunities, instead of traditional physical goods e-commerce.

Vijay Shekhar Sharma, founder and chief executive officer of Paytm, tweeted: “Keeping in mind our attention to building an open platform for e-commerce, our @Paytmmall’s business [will] now be built on @Ondc_official. It will be cost effective, scalable and bring even larger impact to small businesses.”

However, sources in the know indicated that this shift did not sit well with some investors of Paytm E-commerce, the parent company of Paytm Mall. Both Alibaba and Ant Group have exited because the e-commerce space is very competitive and a non-core sector for them in India. “E-commerce will require substantial investments and also the space is still evolving, which means that there will be regulatory changes as well. Both the investors have decided to exit,” said the source on condition of anonymity.

Paytm Mall said it is confident about the new strategy and the road map, and has the support of other existing shareholders. These include Softbank, Elevation Capital, and SAIF Partners.

In 2017, Paytm E-commerce had raised around $200 million from Alibaba and SAIF Partners. According to a Reuters report, in 2018, Softbank had invested $400 million, valuing the company at $1.9 billion.

On its ONDC foray, the company said this move enables it to create a long-term sustainable business, which aims to democratise the purchase and sale of goods in the Indian market, driving transparency and digital independence for small businesses in the country. A spokesperson for Paytm Mall said, “We are set to build on the revolutionary ONDC programme by the government of India to drive online commerce in India. We also plan to explore opportunities in the export market. We are grateful for the support of our investors and look forward to driving sustainable growth.”