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    Paytm to double investment in logistics network to Rs 500 crore

    Synopsis

    Paytm, a payment wallet to ecommerce company, plans to more than double its investment in warehouses or fulfilment centres.

    ET Bureau
    BENGALURU: Paytm, a payment wallet to ecommerce company, plans to more than double its investment in the warehouse or fulfilment centres.

    The company plans to invest Rs 500 crore in the coming fiscal from Rs 200 crore it spent this year to increase its logistic network across the country for it merchants.

    “We are aggressively investing in increasing our logistics services for merchants and aim to have 50 third party fulfilment centres by the end of this year from 19 now,” said Sudhanshu Gupta, AVP business at Paytm . The company has partnered with about 20 national and regional courier partners.

    The online shopping boom in the country has led many ecommerce majors including Amazon and Flipkart to more than doubled their fulfilment centres (FCs) as more and more sellers come on board. Amazon and Flipkart have together rented about 3.6 million square feet of warehouse space in the country, half of which was added in 2015 alone.
    Paytm said it is looking at scaling its courier network in tier II and III cities as over 50% of orders currently comes from non top 10 cities in the country. "We will stick to third-party FCs and courier partners because this is a more scalable model. It takes less investment and we are able to take advantage of their goodwill. Hence it is better to partner or strategically invest in them rather than trying to build a special vertical for this," said Gupta.

    The Alibaba-backed company delivers to 31,000 pin codes as of now and has also tied up with hyperlocal logistics and local commerce partners like Delhivery and Roadrunnr to give on-time and faster delivery. It also has 50 SEED centers, which are consolidation point centers for couriers and pickup services.

    Ecommerce is expected to significantly drive demand for warehouses in the near future. Currently, nearly 25% of the total warehouse absorption is being taken up by ecommerce players, the biggest demand driver for the sector so far. In 2015, the cumulative warehousing supply across eight cities stood at about 97 million square feet compared with 79 million square feet last year. This supply is expected to reach 116 million square feet in 2016, said JLL India, a property consultancy firm in a recent report.

    One97 Communications, which runs Paytm, recorded revenue of Rs 336 crore in 2014-15 as against Rs 210 crore the year before, according to filings with the Registrar of Companies.
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