A dose of self-reliance
On November 8, 2016, when Prime Minister Narendra Modi stunned millions of viewers watching his surprise address to the nation on television during prime time, Paytm founder Vijay Shekhar Sharma was about to leave for dinner at Mumbai’s Leopold Café. He was on a fund-raising mission, for which he was flying off to Hong Kong the next morning. Mr Sharma narrated the events of that evening in an interview to this newspaper later, after the banning of big currency notes or “demonetisation” had made his company a star, almost overnight. As he was travelling, he had missed out on the buzz at his Noidaheadquartered office where his team worked till late into the night on Paytm advertisements. The first ad appeared in some newspapers on the same day as the note ban news, and in many others the following day.
To a question on how the company coped with the sudden consumer rush for using digital payment, Mr Sharma’s answer was that the servers were ready to roll out for the payments bank, and those were pressed into action to cater to the sudden surge in demand. He stayed remotely connected to his team through a Whatsapp group called “Urgent”, tracking the work and also chasing the astounding growth in subscriber numbers for Paytm wallet — the go-to currency in the cashless times. From 125 million wallet customers before demonetisation, it touched 185 million within three months. The user base crossed the 280-million mark by November 2017.
The numbers have come down since those heady days, settling at 150 million average monthly active users or so. But, four years later, there’s a sense of déjà vu as Mr Sharma is back in the news, setting up an indigenous mini app store to rival global majors such as Google and Apple. The spirit is that of “Aatmanirbhar Bharat”, backing the government campaign in the wake of anti- China sentiments. “We are excited to announce the launch of our Android Mini App Store to support Indian developers to take their innovative products to the masses…. Our local India’s app store aims to drive the Aatmanirbhar Bharat mission while keeping the digital consumer spends within India,’’ a Paytm blog post said.
The trigger for all the disruption was Google banning the Paytm app from its Play Store for a few hours as the firm led by Mr Sharma was found to have violated provisions linked to gambling l aws. Paytm, of course, challenged the allegation, saying the American tech giant was arm-twisting companies with its arbitrary policies. It was not given an opportunity to explain its cashback system, according to Paytm. Mr Sharma’s new app store is also a sign of protest against the 30 per cent commission proposed by Google Play Store for listing and distribution of millions of apps on the platform. Google responded by deferring the transaction fee by two years. While Paytm has claimed its mini app store would provide similar services free of cost, there’s been a mixed reaction from the industry. There’s no certainty that Paytm won’t change its strategy later, was how critics reacted.
For Mr Sharma, who’s organising an app developers’ conference on Thursday, this seems to be an hour of both glory and celebration, not very different from how it was after November 8, 2016, when all roads led to Paytm.
Like four years ago, even now the company is in sync with the government’s thinking. And the timing is good too. Earlier this week, the prime minister inaugurated a conference on artificial intelligence (AI) while urging Indian start-ups to make good of the opportunity. On Tuesday, the government cleared 16 projects under the production-linked incentive scheme that would see multinationals such as Samsung and manufacturing partners of Apple to bring in foreign investments. With this, local electronics manufacturing would have an estimated turnover of ~10.5 trillion in the next five years.
As elaborated in its own blog post, Paytm was already readying its mini app store. It was doing a beta run of the store through September. So, it’s possible that irrespective of its run-in with Google, the company would have made a point with its own app store anyway. The make-in-india element is of the essence now in the aftermath of the anti- China narrative, quite like Digital India was relevant in the days and months after demonetisation.
The India story is important for Mr Sharma as Paytm parent company One97 Communications, where he holds a little over 14 per cent stake, China’s Ant Group (earlier Ant Financial and Alipay) — an affiliate of e-commerce major Alibaba — has close to 30 per cent. Alibaba co-founder Jack Ma still holds a controlling stake in Ant group founded in 2014.
Even as the current incident makes it look like a Paytm versus Google faceoff, there may be another angle to it — Tencent, Chinese internet major known for AI and entertainment. Around 16 years senior to Ant, Tencent — co-founded by Pony Ma — is among the prominent app store companies in the Chinese marketplace. Tencent’s Wechat was among the Chinese apps banned recently. In what appears to be a season of apps with the Tatas and Ambanis going all out for it, Paytm may be doing its bit for the Alibaba-tencent rivalry, with a large dose of Aatmanirbhar Bharat.