CONSUMER BEHAVIOUR

ASSIGNMENT

PAYTM

Adalbert P Sha
MBA - A
b2055
 Paytm: Case study

This case study aimed at identifying and analysing the marketing tactics and strategy used by
the Paytm in India and rest of the world. Founded in 2010, Paytm started as a prepaid
mobile recharge website. Currently its business is not only limited to recharge but has
expanded as online payment platform including mobile recharges, utility bill payment, wallet
payment and wallet to wallet and wallet to bank transfers for many leading internet-based
companies like Bookmyshow, MakeMyTrip, Food Panda, IRCTC and many others. It was
founded under the implemented idea of Vijay Shekhar Sharma and has got the first mover
advantage in the mobile industry. The company has been backed up by Alibaba group and
Ratan Tata. The firm raised $575 million from Alibaba group for a share of 25% in the
company.

INTRODUCTION
Vijay Shekhar Sharma owns a company whose current value is a little over $3 billion in the
market in 2016, a dream dreamt when he was struggling to make ends meet with Rs 10 in
pocket. Paytm is growing faster and they have over 20 million registered users as per their
current data. Their website and mobile app have been transformed into a fully-fledged e-
commerce marketplace offering categories from electronics, mobile phones, sports & health,
home & kitchen, books, baby & toys and many more categories. The app downloaded on
various platforms has touched the mark of 7 million. The additional features added like
Bargain power which is not currently available at any other marketplace and unified
dashboard has made the selling and buying more interesting. Monthly order of over 15
million is completed over here.
Paytm in February 2014 launched its mobile based marketplace and now recently has
launched a seller dedicated app with zero commission model. Besides, Paytm has also
contracted with IRCTC to make Paytm wallet as one of the online payment options while
booking a ticket. IRCTC processes around 180 million transactions every year; and Paytm
has a strong base of 60 million wallet users who can use their wallet instead of using plastic
card details. These wallet holders have an access to shop over the app and pay with Paytm
wallet across 21,000 merchants.

PAYTM: THE COMPANY

Paytm was founded in August 2010 with an initial investment of $2 million by its founder
Vijay Shekhar Sharma. It started off as a prepaid mobile and DTH recharge platform, and
later added data card, post-paid mobile and landline bill payments in 2013.
By January 2014, the company launched the Paytm Wallet, and the Indian Railways and Uber
added it as a payment option. It launched into mobile commerce with online deals and bus
ticketing. In 2015, it unveiled more use-cases like education fees, metro recharges, electricity,
gas, and water bill payments. It also started powering the payment gateway for Indian
Railways.
In 2016, Paytm launched movies, events and amusement parks ticketing as well as flight
ticket bookings and Paytm Relater that year, it launched rail bookings and gift cards. Paytm's
registered user base grew from 11.8 million in August 2014 to 104 million in August 2015.
Its travel business crossed $500 million in annualised GMV run rate, while booking 2 million
tickets per month. In 2017, Paytm became India's first payment app to cross over 100 million
app downloads. The same year, it launched Paytm Gold, a product that allowed users to buy
as little as ₹1 of pure gold online. It also launched the Paytm Payments Bank and ‘Inbox’, a
messaging platform with in-chat payments among other products. By 2018, it started
allowing merchants to accept Paytm, UPI and Card payments directly into their bank
accounts at 0% charge. It also launched the ‘Paytm for Business’ app, allowing merchants to
track their payments and day-to-day settlements instantly. This led its merchant base to grow
to more than 7 million by March 2018.
The company launched two new wealth management products - Paytm Gold Savings Plan
and Gold Gifting to simplify long-term savings. It launched into gaming and investments,
partnering with A GTECH to launch a mobile game platform Gamepad, and setting up Paytm
Money with an investment of Rs.9 Crores to bring investment and wealth management
products for the Indians.

BACKGROUND and ISSUES

Vijay Shekhar Sharma owns a company whose current value is a little over $3 billion in the
market in 2016, a dream dreamt when he was struggling to make ends meet with Rs 10 in
pocket. But he tasted victory the hard way. Nothing came easy for him. The tears he hides
behind the chirpy self that he puts up in front of the world could not be hidden for long while
recollecting his journey. Interestingly, it was not talking about his failures that brought tears
in his eyes; it was his hard-earned victory.
Life tested him right from the beginning of his journey to become one of the most influential
people in the business world today. Though he passed his higher secondary when he was just
14 years old, a child prodigy of sorts, making it through college was the first tough challenge
he faced when he left the cosy comfort of his small hometown outside Aligarh and ventured
into the real world.
After selling the firm Vijay worked for some time in a company but soon got bored. He had 2
lacks with him which was enough for him to start a company on its own. He along with his
colleague, Rajiv Shukla, co-founded One97 Communications Ltd, a mobile value-added
services company. But in 9/11 tragedy, their business crashed. His partner left him. He was
with no money now. He started using public transport, lived on two cups of tea. It was again
a hard time for him. His father asked him to take a job. The whole family members were
willing to get him married but no any girl was ready to marry him!
For sustaining his life, he took up a job. But the zeal of doing something of his own keeps his
interest alive from inside. Observing the popularity of smartphones, he decided to do
something around it and in December 2010, he launched Paytm, a mobile wallet. At present,
Paytm has 50 million consumers doing 60 million transactions a month and is expected to
touch 100 million consumers till the end of 2015.

The major issues of Paytm can be grouped as the following

1. Intellectual Property Threats
2. Client computer Threats
3. Delay on refund of the amount

CHALLENGES
Today there are inborn and established e-commerce players in the market. They have existing
grip, branding as well as funding. Paytm has to establish itself in this space - with a highly
efficient and cost-effective manner. We also have a few cards to play - as the largest-
commerce player - how do we translate our success in other domains and how do we leverage
our deep partnerships with mobile service providers, leading by design. E-commerce in India
is growing very rapidly. Paytm have entered into e-commerce because of its easy business
model however, that does not mean that Paytm business is easy to execute as they have
entered into e-commerce very successfully. After demonization of the currency in the Indian
market the usage of Paytm increased very rapidly by reducing the cash transaction in the
economy. Paytm were accepted everywhere for any type of business, and at the same time
many competitors also emerged in the market. With intense competition in this space, it is
important to Paytm to clearly differentiate oneself from other players in the market.

SOLUTIONS
1. To give credit score based on previous transactions and to give credit without the use
of credit card. Now the customer can get product on EMI without the use of Credit
card based on the level of their previous transactions on which they will be provided
with score and based on that score credit will be provided.

2. To work together with bigger brands in order to increase its reach across potential
customers.

3. It has collaborated with Inmobi, one of the largest online platforms to increase
market place reach to 12 million users.
4. Paytms have a plan to invest 15-50 million dollars each in 5 potential start-ups to
acquire around 25-40% stake in them.

5. Ali baba is planning to increase its stake from 25 to 40% with investment of around
600 million dollars i.e., around 3800 crores in Indian rupee.

6. To double paytm users by 2020.

CONCLUSION
In India, there are lots of changes in environment; “change” is only truth in this world. It is
advisable to accept and adapt according to it for survival. Modern financial system has gone
through many changes in terms of payment processing system from traditional banking
system to ATM/ Debit card, Credit card online payment, wire transfer, NEFT, RTGS etc. and
the latest feather in the cap is digital wallet or E-wallet, this paper is an effort to explore the
awareness of this new payment processing system in youth. After administering the survey
result the digital wallet which are popular and associate to the online business company are
more popular and those with the banks are doing fine, mobile companies’ e-wallet is
restricted to the mobile users. People are using a few services mostly for recharging the DTH
and paying bills, but there are many services which are already going on in the international
market and people are using it like square wallet it gives card scanner to scan any credit /
debit card to make payment through mobile device, are still to come in India. The awareness
and practical usability of the E-wallet is low, that should be increased by adding more value-
added services to it.
In 2015, Paytm plans to cross 50 million wallet users and touch $2.5 to $3 billion of gross
transaction volume on Paytm platform. The company also aims to bring one million SME
merchants on mobile commerce platform and reach one million transactions on a daily basis
by the end of 2015. Surpassing IRCTC’s transaction volume has always been the dream of e-
commerce companies in India. And Paytm achieved it owing to its superior consumer
experience over mobile and web. Wallet has also widened the scope of Paytm. The company
registered 100% growth in terms of wallet users over and besides phone wallet seems to be a
major driver in Paytm’s growth by understanding all the strategies and future plans and
challenges we can say that the paytm will continue as a leader in E-commerce.