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PAYTM Business model

  1. INTRODUCTION Founded 2010 Founders Vijay Shekhar Sharma Parent One97 Communications Headquarters Noida, Uttar Pradesh, India Industry Mobile payments and E-commerce Revenue ₹3,314 crore(FY 2018)
  2. Journey Map 2010 Paytm was founded in August 2010 2012-13 Adopts IMPS as a new payment method Crosses 30,000 orders a day. Launched the Paytm Wallet Launched into E- commerce with online deals and bus ticketing 2014-15 Added options for payment of education fees, metro recharges, electricity, gas, and water bill payments IRCTC adds Paytm as a mode of payment 2015-16 Paytm launched movies, events and amusement parks ticketing as well as flight ticket bookings and Paytm QR 2016-17 Launched rail bookings and gift card. 2013-14 2011-12 Launch of Bills and ticketing vertical 2017-18 10 crore app downloads Launched Paytm Gold Paytm Payments Bank
  3. Share Holding Pattern Source-
  4. Value Proposition ● PayTM Wallet enables easy and fast payment and Transfer. ● E-commerce based on trust and credibility of payment. ● PayTM offers bundle services on a single platform.
  5. Service Marketing Mix (7 P’s) Product Mix ● Paytm offers online payment system and e-commerce medium. ● It offers products and services like paytm mall, payments bank, mobile payment, digital wallet, online shopping ,etc. ● Paytm can be accessed on smartphones as well as computers. ● QR code scanning helps in faster transactions. Price Mix ● Paytm is a medium through which customers can make payments. ● Paytm wallet is free for the customers to use. (Except transaction fee on transfer from wallet to bank) ● It also offers great discounts and cashbacks . ● Paytm earns its revenue from commissions on transactions, interest on wallet balance and advertising.
  6. Place mix ● Users can access Paytm through a smartphone or laptop that has internet connectivity like any other app or website. ● Paytm is widely accepted as a mode of payment across various industries, sectors and geographies. ● Almost all the restaurants, supermarkets and hotels accept paytm as a mode of payment. ● These show the extensive reach of the service, which is widely accepted by vendors and customers alike Promotion mix ● Paytm was able to scale up its business quickly after demonetization. ● Ad campaigns have been showcased through TV commercials, online Banners, billboards, Print media like newspapers, magazine, etc. ● The catchy phrase, ‘Paytm karo’ has also helped them to become a household name. ● They also rely heavily on word-of- mouth publicity.
  7. People ● Paytm gives utmost importance to its people (customers, employees and suppliers) Process ● Main objective- ‘to initiate hassle free transactions with user friendly interface’ ● Person is required to load money into wallet or use debit credit/ credit card to make transactions. Physical Evidence ● Presence, awareness and acceptability among merchant and consumers are a solid proof of their physical evidence which can be seen through placards on shops that say-’ paytm accepted’.
  8. STP SEGMENTATION PayTM has done very broad segmentation by grouping people, who have internet access into one segment. There are other parameters for segmentation based on: Demographics- Age Geographic- Tier 1, 2,3 cities Psychographic- Lifestyle Behavioral- Knowledge
  9. TARGETING PayTM has reached large number of internet users via customised email based on historical data,social media,online advertisements,mobile apps and word of mouth. POSITIONING PayTM has pioneered the e-commerce market by successfully establishing Point-of-difference : ● large market penetration ● first move advantage Point-of-parity : ● convenience ● technology.
  10. Competitors DIRECT COMPETITORS (payments)
  11. Major advantages of Paytm over its rivals 1. Ease of Onboarding Merchants 2. Viral Distribution 3. Feet On Street Approach 4. Frictionless Payments
  12. Competitive Advantage s (All figures in %)
  13. Revenue Model 1. Commissions Revenue Model 2. Subscription Revenue Model 3. Advertising revenue model 4. Transaction Fee Revenue Model 5. Interest on investment of customers wallet Balance
  14. SWOT ANALYSIS Strengths ● First mover advantage ● Bundled services ● Credible and Simple ● Cashbacks & Offers ● Convenience options ● Large User Base(35 crore as of June 5,2019) ● Growing Merchant Tie-ups(1.2 crore) Weakness ● Unable to handle traffic when new offers are launched ● Transaction failures Opportunity ● Growing Internet penetration ● Growing smartphone users ● Changing family dynamics ( shift to online shopping) ● Govt emphasis to promote Cashless Economy Threats ● Competitors ● Data Security & Privacy Source:UserBase-
  15. Critique 1. Paytm has been criticised on the grounds that its customer support is not good. 2. It has faced many transactional issues, where people have lost money. 3. It was also criticised at time of demonetization when it used Prime Minister Modi as the face of their brand. 4. In an audit it was found that some of the sellers were colluding with employees to earn cashback offers.
  16. Future Plans 1. Paytm’s newly launched wholesale business is expected to generate 15% of the Paytm Mall’s business. 2. Paytm is going to invest another 5000 crore rupees in business in next 3 years. 3. The company is also aiming to double the number of quarterly transactions from 100 crore per quarter earlier this year to 200 crore per quarter by end of the year. 4. The company intends to invest more money in financial services this year as customer lifecycle is getting to the next level of maturity. 5. The target of the paytm is to capture 50 crore users.
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