Paytm to facilitate sourcing of Chinese products for Indian sellers

Even as the Indian government is fighting to prevent entry of any Chinese equipment into India, especially in tech, online payment platform Paytm is planning a program that will help Indian sellers to procure products from China at cheap rates.

The company will leverage its partnership with the Chinese giant Alibaba to help Indian sellers. The pilot program will include products like fashion accessories, and will gradually move to categories like home decor and mobile accessories. Paytm has identified about 25-30 merchants for the initial phase of this program. It aims to add over 10,000 merchants by the end of this year giving them access to over 5 million products from China.

Bhushan Patil, who joined PayTm as president after serving in Alibaba as an executive, is spearheading the initiative. “We will facilitate the efforts of Indian merchants to scale up and become more profitable. Many Indian sellers don’t have the capability to fly to China to check quality, variety and buy goods. This is where the Paytm advantage works best for them as it bridges this gap and connects them to the Chinese sellers and enables quality and efficient transactions,” Patil said.

PayTm will also offer bonded warehousing facilities and extra capital to these sellers, and also plans to empower the small and medium enterprises (SMEs) with financial support through tie-ups with non-banking financial companies. Paytm will leverage its partnerships with import houses, payments network, and Citibank to facilitate capital that the enterprises can use to buy additional inventory to meet forecasted demand.

Paytm, essentially a mobile payments platform, has invested heavily in its e-commerce marketplace. Its partnership with Alibaba has helped the company sustain its e-commerce segment amidst competition from Amazon, Flipkart, and Snapdeal.

“We expect the Indian SME’s cost to come down three times with our direct connect. Most SMEs don’t import directly, they import from local distributors, and there may be 2-3 steps shuffling, we connect directly,” Patil said. If the pilot program is successful, Alibaba can step in to back the model further with its expertise.