In today’s scenario where demonetization has hooked up the entire country, digitalization

is the new trending occupation. The world is getting digitalized day by day and so are our
lives. We are getting more prone to E-wallets, online transactions, net banking etc and
hence it was a great opportunity for all the E-wallet companies to increase their shares.
Vijay Shekhar Sharma, founder, and CEO of PayTM and One97Communications
executed this idea of digital payment or online transactions long ago. Founded in 2010,
Paytm had initially started as a mobile recharge website (both prepaid and postpaid).As
of now its business is not only limited to recharges but includes online payments that
consist of mobile recharges, utility bill payment, wallet payment and wallet to wallet and
wallet to bank transfers. Many leading internet based companies like Bookmyshow,
Makemytrip, FoodPanda, IRCTC have collaborated with it so as to receive payments.

But indeed this demonetization period became cheery on the cake for Paytm. It has been
observed that around 1million people recently joined Paytm and got themselves
digitalized. From panwalas to rickshaw walas each and everyone is joining Paytm and
going cashless.The e-transaction concept wasn’t new but indeed was full of trust issues.
Many other companies had already tried their luck in such sort of a startup project, but
failed when it came to the reliability of the payments. This issue for solved by Paytm thus
making it a reliable source of e-transactions.

BUSINESS OBJECTIVE:
Paytm has tried its level best to popularize itself through various social/digital media
platforms like Facebook, Twitter, Instagram etc. It has used the tag ”#Paytmkaro”. The
#PaytmKaro campaign is led by TVC with an objective to depict Paytm as the most
convenient and easy pezy simple solution to everyday transactions. They made sure that
more and more people get engaged in using their E-wallets. #PaytmKaro became the
new hashtag that started trending on Twitter. Not only this, on Facebook they started to
post videos of people who have had awesome experience of using Paytm. Day by day
new commercials were realized. All of these commercials had very catchy lines and
tunes.

STRATEGY:
The overall up-to-down 360 degree campaign made sure that all their offers reach out to
its targeted audience on social media too. Sharing their ad on Facebook and Twitter,and
even sponsored posts on Instagram and at time even Snapchat.

However, the most effective of all strategies was the hashtag #PaytmKaro. It was being
added to almost every conversation that is being driven on Facebook and Twitter. All the
feedbacks, complaints (if any), comments etc started excessive use of this hashtag
#Paytmkaro .It’s observed that the ad rolls out some life situations such as money
transfer, online shopping, mobile recharge, paying at petrol pump etc, which is made easy
by Paytm services. This TV commercial that rides the emotional route to connect with
Indian mobile customers, has gained over 50K views on YouTube.

Paytmkaro had no digital campaign budget initially. TV was the primary medium for the
campaign and that is understood with the campaign. However, it seems that the brand
had decided not to invest a sizable budget for its digital marketing campaign.

With an objective of making Paytm a household name when it comes to mobile money
transfer, it was really surprising that why the brand had ignored the social media savvy
audience. But lately they realized its importance and grabbed the opportunity. The brand
planned to run a social media campaign and even succeeded in it. Also at a more later
stage it can obviously drive meaningful conversations with fans around #PaytmKaro.

OTHER PAYTM CAMPAIGNS:

#No more hunger pains on the train #paytmkaro

Paytms tied up with IRCTC’s e-catering. It now allows you to book your meals on the go!
Around 1516 trains without pantry cars are now enabled with the facility to have meals on
the go booked by you via Paytm. This is a major relief to those who travel via train to
often! Paytm is keen to bring the experience to all users across platforms, in every walk
of life. Let’s go cashless!Happy eating & #PaytmKaro

STRATEGIES ADOPTED BY PAYTM TO INCREASE ITS REVENUE

Basically, Paytm uses two strategies behind their heavy discounts/cash backs/sales.
  Killing the competition thereby increasing their market – PayTm has chosen the
formula of giving and take. It has started offering huge discounts to its customers
for any type of transactions they make. They provide certain codes for cash back
which are only redeemable on either their website or android/ios application. It’s
somewhat similar to what Ola cab did by giving discounts on their cab rides. The
whole idea is to offer huge discounts and indirectly force the competitors to go
out of business. Once they set their foot in the market and acquire major share
they will start selling at market price or even higher price.
 Make people use their wallet service – as digitalization is taking over people are
more inclined towards E-wallet, net banking and credit cards and debit card
transactions. Considering the e-commerce platform as an effective tool to fill the
online wallets, the discounts and cash backs offered by Paytm are directly
credited to the customer’s wallet as Paytm cash, which is not eligible to be
withdrawn in their respective bank accounts. There’s a little trick behind this
whole concept. They give huge discounts and cash backs and credit the money
in their Paytm wallets only so that the customer visits again and again and use
their wallet, thereby increasing their shares. This is indeed a long term strategy.
More and more people are inclined towards e-payment these days and PayTm
succeeds in this gameplay they can be a tough competition in micro payments
and earning a smaller percentage of processing fees for every transaction on the
wallet. This whole idea and strategy are quite similar to that of visa and master
card.

CURRENT SCENARIO OF PAYTM GROWTH

 Paytm is growing faster and emerging as a strong E-wallet company. Currently,
they have over 20 million registered users. Their website and mobile app have
now transformed into a fully-functional e-commerce marketplace offering shopping
and buying facilities for categories like electronics, mobile phones, sports & health,
home & kitchen, books, baby & toys and much more such categories.
 The android and ios application is being downloaded on various devices and has
surprisingly touched the mark of 7 million active downloads. The thing the
differentiates Paytm other e-commerce companies is its additional features like
Bargain power which is currently not available at any other marketplace and their
unified dashboard has made the selling and buying experience a lot more
interesting. If reports are to be believed a monthly order of over 15 million is
completed.
Paytm had recently collaborated with IRCTC to make Paytm wallet payments as one of
the online payment options while booking a train ticket. According to the annual reports
of IRCTC, they process around 180 million transactions every year; and Paytm is having
a strong base of 60 million wallet users. Now this is an advantage over the use of cards
which always comes with a threat of being hacked. Hence people can now use this wallet
instead of using plastic card details. All the wallet holders have access to shop over the
app and pay with Paytm wallet across 21,000 merchants across the country.It’s believed
that over the next six months, Paytm which is a Noida-based firm is considering around
25,000+ tickets per day using their e-wallet on IRCTC platform.

Currently, Paytm claims to earn revenues of over $500 million now but eventually jump
to $2 billion by April 2017. Paytm has recently joined the hyper-local venture by starting
grocery delivery in Bangalore. The hyper-local market has raised more than $60 million
over the past two months from various venture capitalists.

Recently Paytm shoots up its business as it has just raised its funding of $575 million
from Chinese e-commerce company Alibaba Group. In the same month, Ratan Tata
who’s India’s leading investor and businessman also invested in the company. Paytm is
planning to utilize this fund in recruiting fresh talent, acquisitions, marketing and brand
building. Read more Startup News.
RESULTS ACHIEVED
Paytm has credited many awards and has achieved many targets in just 5 years.

 Paytm has won NDTV Digitizing India awards for Disruptive Digital Innovator.
 Paytm Apps got featured in Apple apps stores for Best of 2014 in Mobile /DTH
Recharge shopping category.
 Paytm has won a gold medal for Faber Best mobile wallet.
 Paytm had also won the Best Start Up of the year in 2012.

Segment People with smartphones looking for cashless payment transactions

Target Group Urban tier1 tier2 cities- young and middle aged people

Positioning Paytm can be used as an alternate for cash to make payments for daily basic needs

SWOT Analysis

1. Paytm has got extremely high brand awareness across India

2. Paytm was able to scale up its business quickly after demonetization
3. Offers multiple cashback options to customers
4. Paytm is largely accepted by merchants across India, which has helped the brand grow
5. Strong marketing campaigns have helped spread brand awareness
6. Word of mouth of cashless transactions and ease of use has been accepted well by the
Strengths people
 7. Strong investments from Ratan Tata, Alibaba group etc have strengthened Paytm's
position

1. Audience in India is less the savvy as majority consider cash as primary currency
Weaknesses 2. Paytm has diversified too much

1. Paytm can cater to a larger audience with some offline presence as well
2. Paytm can educated customers on accepting cashless transactions and online payments
which would in turn boost their customer base
Opportunities 3. Offer more banking services along with online payment options

1. Banks offering ewallets on their saving accounts

Threats 2. Security and privacy of user is a concern for Paytm

Competition

1. Freecharge
2. Mobikwik
3. Airtel Money
Competitors 4. JioMoney

Paytm already claims to be India’s largest mobile payments platform, with most of its revenue
coming from payments for utility bills, app downloads, and online purchases. The Alibaba-
backed company, however, is eager to find new growth areas for its business and, like many
other Asian e-commerce companies, is honing in on O2O commerce.

The acronym, which stands for both online-to-offline and offline-to-online business, refers to
strategies to get more online shoppers into brick-and-mortar businesses or, on the flipside, to
convince people who prefer physical transactions to try out online commerce and payments for
the first time.

Earlier this month, Paytm acquired local services marketplace Near.in, the first of several O2O
acquisitions it plans to make. Before that, it also invested in deliveries startup Jugnoo and Little,
an app that helps people find deals at stores in their neighborhoods, and signed partnerships with
BookMyShow and Zomato to offer services like ticket booking, restaurant reservations, and food
deliveries.

Near.in is Paytm’s first acquisition in the services sector. Its mobile wallet was already used by
many small businesses, and Near.in’s site will make it easy to manage their clients and
payments, says Paytm founder and chief executive officer Vijay Shekhar Sharma. Most service
providers, especially those who make home visits like plumbers, still prefer to take cash, but
Sharma believes the Indian market will follow China, where Alipay Wallet (the mobile payments
service owned by Alibaba) is used for utility bills, taxi fares, payments in offline shops, and even
“red envelopes,” or gift money, and is seen as a convenient alternative to credit cards.
In India, Paytm also wants to position itself as a better option than credit cards, which are slowly
gaining in popularity but still used by relatively few Indian consumers.

Sharma believes Indians will prefer to use Paytm for small purchases because it doesn’t charge
processing fees (instead, it makes money by taking commissions from telecoms on its platform)
and the app is faster to use than credit card readers. Furthermore, mobile payments make it easier
to pay very small payment amounts, like 67 rupees, instead of rounding them off, giving it an
edge over cash since providers don’t have to carry tons of change.

“In India’s economy, every rupee matters. You don’t want to pay tips, anything extra. A
significant number of Indians don’t have very high per capita income, so every rupee matters and
they barter for everything,” says Sharma.

Combined with its e-commerce marketplace, Paytm’s O2O aspiration may make it seem like
Paytm is becoming a direct competitor to Indian’s three biggest e-commerce
leaders, Flipkart, Amazon India, and Snapdeal. In fact, none of those sites have integrated Paytm
as a payment option (even though there are workarounds), and all three offer their own online
wallet services.

Sharma, however, says that the Paytm’s goal is to create more use cases for its mobile wallet, so
customers get accustomed to using it for almost everything they need to pay for. He adds that
about 60 to 70 percent of e-commerce shipments are still cash on delivery, so if Paytm becomes
ubiquitous enough, companies may eventually have to accept it if they want to encourage more
shoppers to make online payments.

“Our market share is now 70 percent and now we want to get into the offline space by working
with businesses that are offline and haven’t been able to build traction online. We can bring
payments to them,” says Sharma.

Vijay Shekhar Sharma, founder of Indian payment and mobile commerce firm Paytm, is on a mission
to be the first profitable company in the e-commerce segment. For this, he has charted out a multi-
pronged strategy that will lead to Paytm’s break-even sooner than the expected 2017 target.

One of the key strategies that Paytm is trying to replicate from its Chinese parent Alibaba is to
involve the local merchants in the e-commerce and boost their sales through what is widely known as
O2O (online-to-offline) marketplace, a business model that the Chinese e-commerce giant has been
focusing since the last few months. With this model, Paytm, in which Alibaba has a little over 25 per
cent stake, plans to take on bigger rivals such as Flipkart and Snapdeal in terms of both GMV (total
amount of transactions) and profitability.

O2O model

Under the O2O model, a consumer searches for the product or services online but buys it through an
offline channel. For example, a local store, which don’t want to sell online because of the discounting
nature of online marketplaces, may find this model useful. Paytm wants to rope in these local players
and help them drive the footfall and sales at their stores. Paytm benefits as these stores in return act
as individual warehouses and fulfilment centres.
“With a focus on O2O and our other businesses including wallets and recharges, we expect to do
GMV of $10 billion by end of 2016,” Sharma said. Paytm is already clocking about $3 billion in GMV.
To put that into perspective, Flipkart, which started its e-tailing journey in 2007 by selling books,
currently does about $4 billion and expects $12 billion by 2016.

This strategy differentiates Paytm from other e-commerce marketplaces such as Flipkart, Snapdeal
and Amazon, which are pumping in billions of dollars to set up warehouses. While Amazon last year
committed $7 billion to gain the leadership position in the e-commerce market by 2020, Flipkart has
raised a little over $3.2 billion since 2009 and Snapdeal has got $1.54 billion since 2010.

Roping in local merchants

Major part of the investments will go towards building warehouses. In fact, both Amazon and
Flipkart have doubled their warehousing capacity in the last one year at a time when Paytm has
none. Compared to these players, Paytm has raised a little over $600 million so far and has been
instead investing in roping in more local merchants. Starting this year, it has already roped in 1,500
merchants in the top 10 cities. It plans to add another 15,000 by June across 50 cities, which means
that many small warehouses.

According to Sharma, there are sellers deliver the goods to customers directly and incentivises them
to do faster delivery. It also doesn’t give out discounts but doles out cash-backs, which goes to the
customers Paytm wallet thus getting the customer to do more transactions.

The company’s major investments go into expanding its wallet business, getting more sellers on
board and investing in companies that can help Paytm in its growth. For example, it has recently
invested in O2O discovery platform Little and hyper-local service marketplace near.in.

While Alibaba in China is currently targeting the $150-billion O2O services, anything from food to
home services, back in India Paytm is eyeing the multi-billion dollar offline electronics, home
appliances and merchandise segment. No other e-commerce player in India has entered this segment
so far. Paytm entered into the O2O model early this year and sold goods worth ₹500 crore in just 20
days. “Every other marketplace is trying to find its niche. We are optimistic that O2O will drive our
business very fast. We are also identifying other categories that we can trade through O2O model.
Cars and bikes is a big opportunity and we are exploring that. We have already sold 500 bikes on
Paytm last month,” Sharma said, adding that O2O will also drive profitability as it doesn’t require
any investments in logistics or warehousing.

A unicorn status

Meanwhile, Paytm is among the few start-ups in India to have achieved a unicorn status, with over
$1 billion valuation. As of October 2015, they claimed to have 50,000 merchants on the platform and
processing over 75 million orders a month. The company reported a revenue of ₹337 crore in FY 15
up from ₹210 crore in FY14. However, it has posted a loss of ₹372 crore in the last fiscal.

Online payment and recharge company Paytm said its transactions jumped 15-
fold of their daily average revenue following its recently-concluded three-day sale
of general merchandise.

Paytm, which is backed by Chinese e-commerce giant Alibaba Group Holding

Ltd, has been coming up with category-specific sales every month for quite some
time now.

"The idea behind most of these sales is to give visibility to sellers in each of these
categories and also to make sure that the consumer is aware of the assortments
available in all these categories," said Saurabh Vashishtha, vice-president-
business at Paytm.

While the number of sales seems high, the number of sales per category is
actually low. The recent sale was targeted at the general merchandise category
like sports and health, children's toys and gifts, Vashishtha said.

The e-tailer said it is posting a gross merchandise value (GMV) run rate of $1.5
billion and is aiming at a GMV run rate of $3-4 billion by the end of March on the
back of strong growth in transactions.

GMV is a term used in online retailing to indicate total sales value of

merchandise sold through the marketplace over a certain period of time

Industry experts say Paytm's frequent sale strategy is a good way to attract more
consumers and sellers to its marketplace.

Explaining how the sale initiative works at Paytm, Vashishtha said, "We basically
pick up one category every month as a priority category and put our focus on
promoting it by the means of sale. It could be a new category that we are trying
to launch or it can be a large category like fashion and electronics, which we are
trying to scale up. For a large category like fashion, we are usually looking at one
small sale every quarter and one big sale every six months, while smaller
promotions can run over the weekends".

He agreed that the initiative is also a consumer acquisition tool for Paytm.

"During the sale, we see a spike in visits on our website. Consumer engagement
increases too. After the completion of these sales, the user count on our platform
also increases," Vashishtha said.

Patym, which launched the marketplace a year ago, started actively pushing it to
the consumers only this year.
When asked if the company takes advice from Alibaba on how to conduct sales,
Vashishtha said, "We work very closely with Alibaba and they are mostly in
advisory role and would never tell us what to do. But informally, we do discuss
how we do things in India and how the Indian market is different from China. We
do try to understand things that they have done in China which we can
implement here in India as well."

Paytm, which claims to have about 40,000 merchants on board, has set aside
$100 million (about Rs 640 crore) to help sellers go online, ET had reported
recently. The company plans to subsidise sellers as it seeks to get 1 lakh of them
on its marketplace by the end of this year.

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, FoodPanda, 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.

Paytm is growing faster and they have over 20 million registered users as per their
current data. Their website and mobile app has 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.

Success Story
Vijay Shekhar in his initial college days has started his own firm Xs! Corporation with his
batch mate Harinder Takhar which offers web guide services to the clients. They
received seed money of 20,000 from one of the Angel investors. They merged two of
their more friends with them and worked for the company till 1999 after that they sold it
to Living Media India for half a million dollar which is now the India Today group.

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.

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 option 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.

Over the next six months, the Noida-based firm is considering at 25,000+ tickets per
day using Paytm wallet on IRCTC platform.

According to a report, “Paytm claims to earn revenues of over $500 million now but
Sharma says this will jump to $2 billion by December 2015. Half of Paytm’s run rate will
then come from the m-commerce marketplace push. And the focus will be on getting
more users. Alibaba also echoed its view and Erik Jing of Alipay says, “We don’t care
about profitability. We care about SMEs, users on the Paytm wallet.”