A nimble startup is targeting a blind spot of India’s ecommerce giants, and pulling the rug from under their feet

Back in July, a billion-dollar funding round for Indian ecommerce leader Flipkart made waves around the world. The very next day, Amazon founder Jeff Bezos declared from Seattle that he would pump US$2 billion into his company’s business in India. True to his word, the attention-grabbing Bezos rode a truck in Bangalore last Sunday, flashing a US$2 billion cheque which he handed over to the head of Amazon India.

But while the big cats of ecommerce fight it out for leadership stakes in India, a mobile commerce jackal may be running away with the spoils. Here’s one indicator: When Tech in Asia spoke to Flipkart in June, it was doing 100,000 transactions a day on mobile and desktop. That sounded impressive, until we discovered mobile commerce portal Paytm is processing six times as many orders a day. It’s targeting one million orders a day by 2016, and if it reaches that goal, it will be the first in India to do so.

Vijay Shekhar Sharma, founder of Paytm, points to his favorite Chinese saying when asked about how Paytm has flown below the radar.

“Peach and plum trees don’t speak, but still people find them. We at Paytm are like that,” he tells Tech in Asia. “Our numbers, in less than two years, take people by surprise. We like that.”

Another significant number is five million – that’s how many orders a month Paytm gets via its smartphone app, which launched just this year. Those five million mobile transactions account for more than half of its total transactions, showing how the massive shift towards mobile commerce in India plays right into the hands of a mobile-focused player like Paytm.

Better than behemoths

Huge numbers of new users are wading on to the internet along with the tidal wave of budget smartphones hitting India. For this majority, who will only access the internet on mobile devices, user behavior is very different from that of the earlier generations which browsed ecommerce sites on the web. A bottom-up product like Paytm claims to serve these new users far better than behemoths like Flipkart or Amazon, which must adapt their existing models to fit needs of the mobile shopper.

Vijay Shekhar Sharma gives an example of how Paytm is savvier about this new type of online shopper:

On our Paytm app, there’s no ‘add to cart’ button. We omitted it because we wanted to use that space for better things. The problem with internet commerce is that it’s a funnel so big that you end up clicking five to seven times after you want to check out. On mobile, this is lethal. The two-click checkout we do on Paytm is one of the reasons why our consumers give orders in the volume we get.

Vijay Shekhar Sharma, founder of Paytm

Solving payment pain points