Paytm : Case Study

Paytm was launched in 2010 by One97 Communications Limited , Vijay Shekhar Sharma ’s brainchild, Paytm (earlier written as PayTM, means Pay Through Mobile) began its journey as a recharge and bill payment platform which made its way into the e-commerce market in the year 2014.

Paytm was founded by Vijay Shekhar Sharma, the man who was ranked 18th by India Today in India’s 50 Powerful People. He became the youngest billionaire in India.

Sharma’s brainchild was the biggest beneficiary of Prime Minister Shri Narendra Modi's surprise demonetisation in the year 2016 and with over 200 million users, Paytm so far has the deepest penetration in India. The founder believes and lives by the mantra “Go Big or Go Home”.

The demonetisation drive of 2016 has been one of the most significant economic events of the nation. Prime Minister Modi’s unceasing efforts of transforming the nation into a cashless economy. Mobile wallet (m-wallet) platforms found themselves to be in a lucrative position while exploiting the underlying opportunities in the midst of this challenge. Paytm found the opportunity to expand the business.

Paytm launched "Paytm wallet" in the year 2014 as a digital tool to either transfer funds or to purchase something in its store, followed by recharge and other payment options.

Paytm rolled out its payment services facility for offline merchants in 2015 and revolutionised the digital payment system in the country. Paytm also made the necessary move by launching "Paytm Zip", an e-grocery app to connect grocers with users in the year 2015.

Paytm spread out its wings further to explore the e-commerce market by launching "Paytm Mall", a shopping destination for its users, winning inspiration and following the strategies as pursued by Alibaba’s TMall platform in China, the company recently launched an online-to-offline (O2O) commerce platform based on QR codes for organised retail players, small merchants and brands to go online enabling them to showcase
their catalogue to prospective customers.

Paytm became the first in the country to receive funding from Chinese giant, Alibaba. During March 2015, the company received a personal investment from renowned Indian Industrialist Ratan Tata along with a $575 million investment from Alibaba Group. Ant Financial Services Group took a 25 percent stake in One97Communications.  51 percent share of Paytm Payments Bank Limited (PPBL) is owned by Vijay Shekhar Sharma.

Paytm suffered huge losses amounting to about INR 1,549 for the financial year 2015-16 compared to INR 372 crore in the previous financial year. However, November 8, 2016 changed the fate of Paytm as demonetisation came into effect.

After demonetisation, Paytm receive around 4,00,000 orders per day which is the second highest number of Internet transactions in the country after IRCTC. Since the first day of demonetisation, about 60000 users registered with the app every day. The amount of money transferred to Paytm wallets increased by 1000 percent in just two days.

According to data in a report prepared by  (Reuters), Alibaba-backed Paytm witnessed an increase in market share in the six months to April at 67.9 percent while its rival Freecharge had a share of 11.4 percent. MobiKwik was lagging behind at 5 percent.

A trademark infringement filed by PayPal for use of similar color patterns and an
advertising tools were some of the critical areas that raised concern for Paytm. The case is still on hold.

Paytm is targeting 2 billion transactions by the end of 2017 and a user base of 500 million by the end of 2020.

“Ab ATM nahin, Paytm Karo” is the slogan of the company in the advertisement.

Favorite quotes :

1. If you don't give a chance, who will?
    If you don't take a chance,  who will?
    You should take a chance on yourself.

2. I don't need to sleep, I'm living a dream.

3. If you're up against a big guy, ignore the big guy.