Around 10 crore+ Chinese products will soon flood Paytm’s platform, which has the power to disrupt the Indian ecommerce market. With prices as low as Rs 3, Indian sellers can expect some major disruptions in the market.
Christened as ‘Virtual Chinese Bazaar’, Paytm has set some long term goals to conquer the Indian ecommerce market with cheap Chinese products.
Paytm has allocated an investment of $600 million, which will be spread over a period of 3 years, using which Paytm will integrate thousands of Chinese sellers from Alibaba’s platform. Sellers from popular services like Tao Bao, TMall and Ali Express (which are part of Alibaba’s eco-system) will soon be seen on Paytm’s ecommerce platform to lure Indians into buying 10 crore+ Chinese products prices of which start from Rs 3.
Vijay Shekhar Sharma, founder of Paytm said, “Together (with Alibaba), we can build the truest commerce powerhouse for the country. India’s ecommerce might be getting ready for a price war at a different level.”
From consumer’s point of view, purchasing Chinese products would now become easier, as Paytm’s wallet will allow them to pay safely, in INR. The investment of $600 million would be used to acquire new customers, improving technology, marketing the Chinese products in India, build trust among customers and to generate revenues of $700-800 million in three years.
However, from the point of view of an Indian seller, it can cause some discomfort.
Open Market vs Protected Market
Advocates of Open Market would whole-heartedly welcome this move by Paytm to flood their ecommerce platform with cheap Chinese products, as it gives a wide range of options and choices for the end user.
But the question which arises now is: Will a small scale Indian manufacturer/seller will be able to withstand this onslaught of cheap Chinese products?
Due to their ruthless policies of industrialization, China now commands a share of 80% of the world’s air-conditioners, 70% of its mobile phones and 60% of its shoes in manufacturing. In 1990s, they had a share of less than 3% globally.
Ofcourse a closed, protected market is not the solution here. If not Paytm, then it can be any other portal who will try to cash in the massive opportunity. But there should be a price barrier for some products, even in the open market, to ensure that ultra cheap, low cost labor in one country doesn’t destroy an entire market in another country.
Indian sellers and manufacturers need to pull up their socks now, and counter the avalanche of 10 crore Chinese products on Paytm.
Should Paytm use their massive platform to promote and sell cheap Chinese products? Or it will signal a new beginning for ecommerce industry in India? Do share your views by commenting right here!