“Paytm in 372cr loss”; Ministry of Corporate affairs

Alibaba backed up digital payments and commerce platform Paytm reported a loss of 372 crore in the revenue till March 2015, compared to a profit of around 5 crore in the year 2014.

A Noida-based company’s entry into the e-commerce business was the reason loss was accounted for, where intense competition with Flipkart, Amazon and Snapdeal has forced paytm to spend huge sums on marketing and customer accession.

Paytm, recorded a revenue of Rs 336 crore in 2014-15, as against Rs 210 crore the year before. The company’s expenses swelled to Rs 697 crore, compared to Rs 200 crore in the previous year. It earns revenue by facilitating payments, via its wallet business and earning commissions through its e-commerce platform, where it aggregates thousands of sellers.

They increase in expenses in 2014-15 was driven by a 12-fold rise in its advertising and marketing expenditure to Rs 403 crore. All major e-commerce companies, including Flipkart, Amazon and Snapdeal, are loosing heavily year after year. The three biggies together accounted for losses of over Rs 5,000 crore in 2014- 15.

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Paytm, wallet in hand

Paytm closed 2015 with an annual gross merchandise value, or GMV, of $3 billion. GMV is the value of goods sold on a platform, and in Paytm’s case, also includes revenue. As reported on January 23, Paytm’s core payments business made operational profits at the end of 2015. But its e-commerce business loses over $20 million a month, primarily because of the discounts it offers on products.

Paytm is getting big support from Alibaba, the Chinese e-commerce giant. The company received $200 million in funding from the Alibaba Group affiliate entity Ant Financial in February last year, and another $500 million in September, this time from both the Alibaba Group Holding and Ant Financial. The Alibaba Group now holds 40% stake in the company, and multi-stage fund SAIF Partners, Paytm’s early investor, holds 30%. Sharma holds about 21% stake. The company is said to be valued at about $3.5 billion.
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Prashant Tripathi

A crazy photography ,a developer,blogger and editing geek....loves to play with images and their colour contrasts. A web experimentalalist too.