Not US, it’s China that is changing India’s Net firms
For years Indian internet companies have modelled themselves around American startups. Flipkart copied Amazon, while Ola took a leaf out of Uber’s books.
That’s changing as smartphones become the primary devices for internet access.
This has made two Chinese firms, WeChat and Alipay, internet’s new poster boys. They allow you to book cabs, pay for food, stream movies, order home services, and transfer money without leaving the a pp. In China more people use mobiles phones to access the internet than anywhere else in the world. The money gets transferred from one wallet to another.
In India, One97-owned Paytm is building a similar eco-system. “India needs to learn from China – how it is changing the internet,” says Vijay Shekhar Sharma, CEO and founder of One97.
Meanwhile, he will hive-off the physical goods e-commerce business, which needs logistics, while Paytm will deliver digital goods such as bill payments, paying offline merchants, none of which requires logistics.
“Integration of a large-scale engagement platform, with financial services and content, is of huge value. It solves an important issue of daily usage,” said Alok Kshirsagar, senior partner at McKinsey & Co.
Flush with capital, from its recent fund-raise of $300 million (just over ₹2,000 crore), Paytm will add 15-20 more services to its existing list of 25 — hotel booking, and home services are next.
Paytm does transactions worth $300 million every month, without adding the e-commerce marketplace. It has 400,000 offline merchants. Apart from Paytm, Hike Messenger, run by Sunil Bharti Mittal’s son Kavin, is building a super app around chat, more like We Chat. It has raised $175 million(almost ₹1,200 cr ore) from Taiwan’ s Fox conn and WeChat’s owner Tencent.
Hike plans to have almost every service integrated with chat. It has integrated Hoppr, its coupon business, which throws up deals to Hike users.
Such apps also allows to breakeven faster. For example, after 10 transactions a Paytm user becomes profitable. In a month, an average active user does six transactions. A recent presentation shows that the company is operating at a loss of 1%.
With many users and higher number of transactions, Sharma, will use analytics to sell more services, financial services (such as loans and insurance), and push advertising.