PhonePe Halts Pincode's B2C Operations To Focus On B2B Solutions

SUMMARY

PhonePe has announced that its consumer app, Pincode, is halting its B2C operations to focus exclusively on B2B business solutions for offline shops

PhonePe will divert all of Pincode’s resources to build and scale a suite of B2B business solutions

Launched in 2023 on the ONDC platform, Pincode was a consumer-centric shopping app, onboarding retail stores so users could buy directly from them

PhonePe has announced that its quick commerce app, Pincode, is halting its B2C operations to focus exclusively on B2B business solutions for offline shops. While the B2C shopping app is now defunct, PhonePe will divert all of Pincode’s resources to build and scale a suite of B2B business solutions.

As per Pincode CEO Vivek Lohcheb, Pincode already offers solutions like inventory management, order management, along with B2B direct sourcing and replenishment solutions for certain categories

Pincode was first launched in 2023 on the ONDC platform as a consumer-centric shopping app, onboarding retail stores so users could buy directly from them.

After investing INR 90 Cr in two tranches between 2023 and 2024 into Pincode Shopping Solutions, PhonePe spun Pincode off the ONDC network to develop its own marketplace infrastructure.

Later, in 2024, Pincode began piloting quick delivery service in parts of Bengaluru, Delhi NCR, Mumbai, Pune, Hyderabad and Varanasi under which it delivers groceries and other products in 10-20 minutes

Unlike most quick commerce players, Pincode opted a different path from dark stores, by operating as a marketplace model, where it brings together neighbourhood kirana stores and buyers on its platform.

“…Operating yet another B2C quick commerce app ourselves was distracting us from our core mission which is to help offline business partners achieve operational efficiency, improved margins and visibility and growth in their existing offline business,” PhonePe founder and CEO Sameer Nigam said.

Despite its constant efforts to reshape the app, PhonePe faced challenges in scaling Pincode amid intensifying competition in the quick commerce segment. While some quick commerce players such as Blip and Otipy have shut down, players such as Zing have opted to reshape their business model.

Meanwhile, the move aligns with PhonePe’s bid to streamline its operations ahead of its public listing bid. The digital payments app, PhonePe, was launched in 2016 and has scaled to over 61 Crore registered users and a digital payments acceptance network spread across over 4.4 Crore merchants.

As of now, its products and services include consumer payments, merchant payments, lending and insurance distribution services, as well as new platforms like Share.Market (stock broking and mutual funds distribution platform) and Indus Appstore (Android-based mobile app marketplace).

The UPI leader filed its draft red herring prospectus (DRHP) confidentially with the markets regulator for an IPO in September. As per sources, the company’s IPO will comprise solely of an offer for sale (OFS) component around INR 12,000 Cr ($1.35 Bn), allowing investors like Tiger Global and Microsoft to partially exit the startup. However, parent Walmart is expected to not partake in the OFS component.

On the financial front, PhonePe narrowed its net loss by 14% in FY25 to INR 1,727.4 Cr from INR 1,996.1 Cr loss incurred in the previous fiscal year. Its top line zoomed 41% to INR 7,114.8 Cr in FY25 from INR 5,064.1 Cr in FY24.