Paytm Mall has turned into a classic example of how things can quickly turn south in business if fundamentals are ignored. Just three quarters ago, it was the third largest Indian e-commerce company splurging SoftBank and Alibaba capital on cashback and freebies.
Fast forward in October-November 2018, Paytm Mall realised that it can’t sustain the cashback driven play and resorted on downscaling consumer-facing business (company’s loss in FY 2017-18 was ~$250mn). As a fallout of downscaling, it went through massive leadership and middle management attrition while facing the seller’s flak for unsold inventories.
Also, there have been questions raised around royalty payments/customer access fees to the tune of $100mn from Paytm Mall to Paytm’s payments business.
