Paytm with Alibaba to source 5-million products from China

India: Paytm with Alibaba group to let Indian sellers to source more than 5 million products from China at cheaper rates, as well as helping those sellers in payments and as well as logistics. The main reason behind the programme to have at least 10,000 merchants by the end of 2016, and allowing them to source products from China. The company has identified the need of the products like home and kitchen, innovation including USB cookers, etc. fashion and mobile accessories and western fashion, etc., that the sellers are demanding these days.

Sellers via Paytm, can sell the products on other platforms such as Flipkart, Snapdeal, Amazon, ShopClues, etc. as well. Currently, the sellers need to pay around 30% duty at the time of sale, which can be avoided with the help of this programme between Paytm and Alibaba.

According to a recent report by Techsci Research “India E-commerce Market Forecast & Opportunities, 2020”, the country’s e-commerce market is projected to grow at a CAGR of more than 36% during 2015-2020. E-services segment, which comprises online travel, online payments, online classifieds, etc., is expected to continue its domination through 2020. However, the e-tail segment that includes electronics, apparels & accessories, health and personal care, etc., is expected to witness significantly higher market growth compared to e-services segment over the next five years. During 2015-20, the western region is expected to remain the largest e-commerce market in the country. Major players operating in India’s e-tail market include Flipkart, Snapdeal and Amazon.

According to TechSci Research, the deal will help in bringing the cost of the products to come down by three times, when compared to the cost, that the customers are paying now, as the deal will enable the sellers to import directly from China, rather than making the local distributor as a middleman, which increase the cost of the product, by adding on their margin. The warehousing facility, provided by Paytm is helping sellers in maintaining its stock, which has reducing the extra cost of stocking the products. The Company is mainly focusing on B2C commerce business, where they will connect the Indian buyers directly with the suppliers from China, which will help in gaining better margins. These margins, will allow India sellers to buy additional stock to meet the unexpected demand in the forecast period.