Mobile innovator Paytm now has biz tycoon Ratan Tata in its corner to take on India’s ecommerce leaders

While the big cats of ecommerce fight it out for leadership stakes in India, there’s a jackal quietly running off with the spoils – mobile ecommerce company Paytm. Alibaba’s financial affiliate Ant Financial has a 25 percent stake in it, and now Ratan Tata who heads the US$100 billion Tata group has also picked up a minority stake in it.

The Delhi-based startup is currently cashing in US$1 billion GMV (gross merchandize value) on its mobile app alone, and on average does 1 million transactions a day across the Paytm app and other partner merchants. “This year our target is to grow to US$4 billion GMV,” says founder and CEO Vijay Shekhar Sharma..

The biggest hitch for mobile shopping in India is payment. There are hundreds of millions of debit and credit cards issued in the country, but only about five million credit cards are actively transacting online. Fear of fraud stops many Indians from giving out their credit card details. Cash-on-delivery is a popular option, but many small merchants cannot cope with inventories and logistics, or the inefficiencies of such a system.

Paytm tackled this challenge early on. Its parent company One97 built a strong payments processor, which is now used by other big players in India like Uber, BookMyShow, and MakeMyTrip as well. It works as a mobile wallet service. “We already have 25 million active wallets. Our average wallet balance is INR 150 (US$2.40). Our ambition is to build 100 million wallets by this year-end,” Sharma says.

“There is no better advisor [than Ratan Tata] for Paytm on building India’s most trusted mobile payment and commerce platform,” he adds.

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