Paytm Mall has managed to shrink the cash burn rate to Rs 40 crore after it peaked at Rs 200 crore in 2018.
The move is expected to give a longer runway to Paytm Mall’s struggling business. The online mobile marketplace is a subsidiary of One97 Communications' Paytm brand.
“More than focusing on gross merchandise value, or GMV, we are focused on increasing revenue and the levers contributing towards it,” Economic Times quoted Vijay Shekhar Sharma, CEO, Paytm as saying.
Paytm Mall has plans to offer services like advertising and marketing to offline sellers to generate revenue.
Recently, Paytm Mall has taken a leaf out of Alibaba to focus on an online-to-offline strategy. The Chinese tech giant is the largest investor in Paytm Mall.
The company has also pulled the plug on its national ecommerce shipping business. It now gets 70-80% of its orders shipped from the same city.
Sharma says he is targeting Ebitda break even in two years. “We will continue to invest for another year on growth milestones and the year after that we will focus on turning break even,” he said.
The company is targeting Rs 17,000 crore in gross merchandise value (GMV) by the end of 2019-2020 financial year (FY20). Paytm Mall had claimed it has already broken even per order basis and would be profitable in the next two years.
The company is in talks with eBay to raise USD 160-170 million in strategic investment, ET reported earlier. “We ended the last financial year at Rs 13,000 crore and are targeting Rs 17,000 crore in GMV in a contribution-positive manner where we have cut our costs by one-third,” Sharma said.
Paytm Mall has raised a total of USD 645 million in funding over two rounds. It raised an unknown amount of funding on Jun 2, 2018 from the set of existing investors.
Paytm Mall is mainly funded by three investors. SoftBank Investment Advisers and Alibaba Group are the most recent ones to come on board. According to Crunchbase, Paytm Mall has USD 1.1 million in estimated revenue annually.