Paytm has recently revealed that it expects to register over 50% increase in the worth of goods and services sold every month on its platform.
The Payments and Commerce Company are seeing more people begin to use the digital wallet to pay for a range of transactions at stores and theatres across India. The bulk of it is coming from three categories- ticketing, recharges and offline payments, said CEO Vijay Shekhar Sharma.
The Noida-based company expects to clock monthly sales of about Rs 3,300 crore ($500 million) by this December. This includes payments for parking, movie tickets, fuel, education and travel.
Currently, the company records monthly sales of about $300 million and incurs an operating loss of about 1% which includes the cost of online marketing, maintaining a payment gateway and providing cashback incentives to consumers.
Sharma states, of the 120 million registered users on Paytm, close to 17-million people open the app every day. “We are seeing a network effect, some of our new categories are growing without significant investment,” said he.
The most used category has been the cash recharges, which now contributes to 22% of its sales, while payments for utilities including electricity bills contribute 10% of sales.
In the digital wallet business, Paytm competes with Sequoia Capital-backed Mobikwik, Snapdeal’s FreeCharge and Naspers funded PayU Money.
The company is also reportedly preparing to spin off its mobile marketplace as a separate entity and brand by the end of this year. China’s Alibaba is reported to be considering a possible investment of between $300 million and $400 million in the new entity.
Alibaba, with its affiliate payments company Alipay, has already built a significant toehold in Indian online retail with around 40% stake in Paytm and little under 5% stake in Snapdeal.
Alibaba had directly acquired a 20% stake in Paytm last year in September, while affiliate Ant Financial owned just over 20%.
