Niki’s AI assistant enables new internet users to access online services and digital payments in regional languages
Niki is using voice commands for bill payments, ticket bookings, recharges and other service needs
With support for Hindi, Bengali and Tamil, it’s looking to add Telugu, Kannada, Malayalam and Marathi soon
On the way back home, an autorickshaw driver wondered, “Do you use Paytm? Can you please recharge my phone?”
Facing trouble in adding money to his digital wallet, he had to turn to strangers to ask for help. This is not an uncommon scene in India, where despite the penetration of mobile internet and digital transactions, many first-time internet users need assistance in finishing tasks such as paying bills or recharging phones through online platforms. This adds a layer of local agents and young family members who provide assistance and troubleshoot issues.
But technology can improve this several times over. With instant resolutions to fintech queries from novice users, Bengaluru-based conversational AI assistant Niki is looking to do just that. The startup aims to replace hyperlocal agents or the middle-layer of human fintech assistants with its voice assistant.
Founded in 2015 by Shishir Modi, Sachin Jaiswal, Keshav Prawasi, and Nitin Babel, Niki allows consumers to pay utility bills, recharge their prepaid mobile accounts, book tickets for travel and accommodation, avail local deals and more, simply through voice commands.
Backed by Ratan Tata, Niki (which began life as Niki.AI) is compatible with three Indian languages — Hindi, Bengali, Tamil — besides English. This makes it a great companion for those who are using the internet in regional or vernacular languages.
According to Jaiswal, voice is the best way to approach such use-cases as even typing in local languages is not always simple thanks to the use of matras, bindis, and half letters.
“With voice support, new users do not have to worry about user interface and can simply talk to the app as they would do with a local travel agent or a friend.”
But it’s not just about coaching consumers to pay online — Niki goes one step beyond and also helps them complete these transactions online and pay for them using cash. Currently only available in Bengaluru, Ajmer and Bikaner, cash on delivery (COD) operations are handled by Niki employees who visit the user’s home to pick up the cash.
While Jaiswal agreed that COD is heavy on operations, he added, “If you are solving for an agent use-case, you have to build the user experience in terms of how the customer wants it.”
He also noted that even in product ecommerce, close to 60% to 70% orders are cash on delivery. For Niki, about 30% of the users are opting for the COD option.
Niki Joins India’s Frenetic Digital Services Market
Niki claims to have completed about 1 Mn transactions across Hindi, Bengali and Tamil. Out of Niki’s 4.5 Mn user base, 80% users are said to be from Tier 2, Tier 3 and Tier 4 cities such as Jaipur, Gharsana, Surat, Aurangabad, Muzaffarnagar, Ludhiana, Patna, Indore, Sri Ganganagar, Faridabad, and Agra.
Online transaction use-cases such as utility bill payments and travel ticket bookings have become a battleground for many technology majors such as Alibaba-backed Paytm, Flipkart-owned PhonePe, and Google Pay. While each continues to offer discounts and cashbacks to acquire a larger market share, there is no clear winner.
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Vijay Shekhar Sharma-led Paytm did see massive adoption initially, because of its first-mover advantage and the post-demonetisation fintech wave. However, the company was recently struggling to make profits with losses jumping by 167% in FY19 as compared to last year.
Also, Paytm’s transactions volume were reported to have fallen down in July 2019, while the numbers for Google Pay and PhonePe have been on the constant rise, with retail expansion also happening simultaneously. Amazon has doubled down on Amazon Pay and is also expanding into retail payments with the UPI-based service.
Other global technology companies such as Uber and Facebook-owned WhatsApp have also shown interest in India’s $1 Tn worth digital payments opportunity. Even though most of these players do not have vernacular voice support like Niki, Amazon and Google both have developed voice assistants that are already integrated into many Indian customers’ smart devices.
Is Services Commerce The Next Big Thing?
So what sets Niki apart? “Many digital payment companies are trying to aggregate services commerce in their ecosystem, but their solutions are limited because payment companies are adding new use-cases to increase customer engagement and not solving the customer pain points in accessing those services.”
While Jaiswal may have a point there, Amazon has also recently entered the voice-based payments space with flight/hotel bookings and its own digital wallet, Amazon Pay. In addition to this, Amazon’s voice assistant Alexa also has Hindi language compatibility for Indian users.
Responding to this, Jaiswal said it is a $100 Bn market and multiple players will try to take a bite out of this market, but none of them have built capabilities around what he calls ‘services commerce’ or the service delivery aspect which is blended with digital payments. Thanks to its on-ground network, Niki is in the position to fulfil a range of services that the other fintech giants may not be able to match yet.
“None of these companies are focussed on services commerce and therefore, by just focussing on this problem we can solve it much better. Even if we just capture like 20% of the market, it will be about $20 Bn revenue opportunity,” he added.
To support its expansion and the potential user growth, it is looking to add seven more languages including Telugu, Kannada, Malayalam and Marathi in the next 12 months. Operational in 18K pincodes, the company wants to further include 25K more Tier 2, 3 and 4 locations by March next year.
Its expansion efforts will be backed by its on-ground user acquisition strategy. Niki has partnered with local agents to setup kiosks that help promote its service commerce offerings among the local population. The company has also partnered with influencer networks on apps such as TikTok through which it is able to expand its reach beyond this network. According to Jaiswal, its current cost of acquisition per user is around INR 23 and on average, a user spends close to INR 14.6K in six months on Niki or just over INR 2K per month.
Niki earns revenue through commissions levied on merchants such as bus operators. For a bus ticket booking, Niki charges 8% commission from merchants, while the customer avails the service at the same cost as they would do offline.
Niki claims to have 85% customer retention in the first month of sign-up which settles down to 48%-50% over a six-month period. The company is currently doing close to $44 Mn in GMV. By financial year 2020, Niki aims to reach a GMV run rate of $120Mn with a revenue run rate of $20 Mn and a customer base of over 10 Mn by FY2020.
With eyes on capturing the huge market of upcoming new internet users in India, Niki is now working on increasing the user spend per user by moving beyond digital payments.
One of the new use-cases that the company is exploring is social payments, where friends or family can pay on the user’s behalf. It is also looking at spiritual tour bookings for destinations such as Vaishno Devi or Kedarnath. In addition to this, the company is currently piloting grocery retail, which would make it the first grocery delivery platform to rely on voice commands. It also wants to add use-cases such as delivery of egovernance services such as passport, Aadhaar card and more.
Clearly, Niki is going all-in with its model of service delivery combined with the ease of use of voice-based payments. Will it work in the long run as more and more payments platforms such as Paytm, Amazon Pay, Google Pay and PhonePe solve for the same set of problems, backed by their deep pockets and higher brand value?
- The article subhead was changed to ‘Niki Joins India’s Frenetic Digital Services Market’ from the earlier ‘Niki Joins India’s Frenetic Digital Services Market’
- Some sections of this article have been edited after publishing to fix typographical errors and improve the clarity of language.
- Headline changed from “Niki Looks To Solve Payment Pain Points With Regional Language AI Assistant”