Paytm seems to have big plans for years 2017. After losing out on acquiring on FreeCharge, the company has now rolled up its sleeves to take on the market share of in-app chat services in India such as WhatsApp and Hike. The Alibaba Group-backed company is now in the process of integrating a WhatsApp like in-app chat service on its native app. With this launch, Paytm aims to replicate the success of Tencent’s WeChat business model in China.
As per reports, the company will launch the service in the next few weeks and it will bet live probably by the end of this month.
“Having such a (large) user base, the company wants to take on WhatsApp and emulate the WeChat model for long-term gains. Paytm has already started offering different aggregated content in its app, indicating it wants to have multiple services on its platform,” a person close to the development said.
An email sent to paytm did not elicit any response till the time of publication.
A Glimpse Of The Success Of Chat Services Hike, WhatsApp, And WeChat
WhatsApp started out as a simple in-app chat service where users could share text, image, and videos globally. After getting acquired by Facebook in October 2014, WhatsApp integrated multiple features such as voice and video calling facility in line with its global peers, WeChat and Line.
At present, WhatsApp has 200 Mn users in India, as per stats available for February 2017. WhatsApp has now also entered the digital payments race and has recently approached SBI, NPCI for the permission to enable UPI-based payments on its platform. The company is also in talks with multiple banks for collaborations to integrate payments with its in-app chat service.
Being one step ahead of WhatsApp, homegrown messaging service Hike already launched its UPI-enabled digital wallet – Hike Wallet in June 2017. A Tencent-backed company, Hike currently boasts of 100 Mn users and claims to transact over 40 Bn messages per month.
WeChat, on the other hand, is a popular in-app chat service in China and is another Tencent-backed company. By the end of Q4 2016, WeChat had 889 Mn monthly active users, 10 Mn official accounts, and 200 WeChat developers. WeChat’s mobile payment service, WeChat Pay is the primary payment method for offline purchases in China, with 93% adoption rate across Tier I and Tier II cities. The reason cited for such a wide adoption of mobile for making offline payments is that people do not prefer to carry cash with them. Plus, it’s easy, fast, has cashbacks, and no extra fees for the transaction.
What Paytm Is Trying To Cash In On
Paytm currently has a user base of 230 Mn in India and has already established a WeChat Pay kind-of payment mechanism in India. Post-demonetisation, the company saw a sudden surge in its user base. However, it now claims to have a larger percentage of registered users than transacting ones.
Paytm’s attempt to replicate WeChat’s in-app chat service model in its platform is an attempt to capitalise on its growing user base and increase the number of transactions on its platform. Plus, this will help the company in further strengthening its grip on the Indian digital payments market where hawk-eyed players like WhatsApp, Hike and Google (integrating its digital payments service Android Pay with UPI) have already announced their arrival.
Paytm also recently raised $1.4 Bn from Softbank. Thus, it has enough funds to fuel its aggressive expansion plans in the country.
Prior to this, Paytm had partnered with a number of service providers to integrate facilities such as mobile recharge, DTH payments, travel bookings, movie ticketing, etc. on its platform. Also, Paytm has been running businesses in different verticals including Paytm Payments Bank, Paytm Ecommerce, and Paytm Digital Gold.
Recently, the company even formed a joint venture (JV) with Hong Kong’s mobile games development firm AGTech Media. With this move, Paytm aims to develop mobile games for Indian consumers. The company is also looking to foray into food delivery and grocery segments soon. Paytm is said to be picking up stake in online hyperlocal grocery delivery startup Big Basket for $200 Mn, as per media reports. Other startups where the company has picked up a significant stake in 2017 include Noida-based MobiQuest Mobile Technologies’ loyalty platform’loyal, and events ticketing venture Insider.in.
With WhatsApp and Hike already having a significant presence in the Indian market, how Paytm will be able to replicate this success in its in-app chat service, remains to be seen. Also, the success of WeChat Pay in China is mainly because of an already existing infrastructure for a cashless society. While in India, that structure has just started to develop post-demonetisation, less than a year back. Thus, it will be interesting to see how Paytm looks to increase in-app transactions with its chat service.
(The development was reported by TOI.)