If one were to table a list of the happiest entrepreneurs in 2016, Paytm founder and CEO Vijay Shekhar Sharma would undoubtedly be on top.
The mobile wallet company has been the single-largest beneficiary of the government’s move to ban currency notes of R500 and 1,000. Ever since the decision was announced on November 8, Paytm’s user base has touched 160 million -- more than the population of Russia.
MobiKwik, Paytm’s second-largest competitor, is one fourth its size.
Paytm has become a verb -- Paytm karo (Do Paytm). “I don’t need to sleep, this is a dream that I am living while trying to solve the pain of people,” said Sharma.
And some dream it is.
Sharma was in Mumbai, at Forbes magazine’s award function, when Prime Minister Narendra Modi announced the demonetisation drive. His phone remained silent, while India’s economic history was being rewritten; when he looked at his phone, there were 73 messages on his business WhatsApp group and countless calls.
Once Sharma got over the surprise, he hit back with full force. “We will be known for our speed,” he told HT.
From vegetable mongers, small shops, doctors and sex workers, Paytm is now everywhere.But Sharma has had his share of criticisms also.
“Paytm is the biggest beneficiary of PM’s announcement. Next day PM appears in its ads. What’s the deal Mr. PM,” Delhi’s chief minister Arving Kejriwal had tweeted .
Sharma was quick to reply: “Dear Sir, the biggest beneficiary is our country. We are just a tech startup, trying to solve financial inclusion and make India proud.”
Paytm was all over the place – full page advertisements on newspapers, adding 30,000-40,000 merchants every day, and waving off transaction fees. And Sharma is blowing up millions of dollars to squeeze most out of the moment. He is confident that even when the cash comes back, many would stay loyal to the platform. “Paytm will become a habit,” he said.
But contrary to popular belief, Paytm is losing money like never before. In November, the company spent R150 crore. Losses of wallet companies are expected to soar at the end of 2016-17.
It’s not only Paytm. MobiKwik and Freecharge were the other two wallet companies that gained from the demonetisation exercise.
Kunal Bahl, founder and CEO of Snapdeal, which owns Freecharge, said the “wallets race is between two player – Freecharge and Paytm.”
Freecharge is the only integrated wallet with an e-commerce platform – 15% of Snapdeal’s orders are paid through Freecharge. Both the apps have the other one in-built.
In the first few weeks after demonetisation, first-time users increased 1,388%, and two out of every five users loaded the Freecharge wallet for the first time. Bahl was elated. “We never had these many first-time users,” he said.
Currently 46.62% of Indians currently have apps (those used for recharge, wallets and payments) installed on their cellphones, according to analyst firm AppAnnie. The number is only expected to grow in the coming days.
So there’s a war brewing in the m-wallet space.
MobiKwik founder Bipin Preet Singh has called Paytm’s ads, which show paan shops and vegetable mongers using the platform, a zero-sum game. “It’s not real business… We will not let anyone else win,” Singh said.
It took some time for Singh and his wife Upasana Taku (co-founder of MobiKwik) to carve out a strategy, which remains similar to what Paytm does – going after the offline neighbourhood merchants.
MobiKwik will also go after new internet users, who have cheaper smartphones, low bandwidth, and those who do not speak English. It has also launched a lighter version of its app, which Singh claims works well on 2G.
Both Paytm and MobiKwik have also launched their apps in local languages to attract a larger number of users – all this had led to a daily addition of up to one million new wallet users.
Meanwhile, Sharma’s father has doubled-up as an adviser. He called Sharma at 11 pm last week to say that the company’s Aligarh representative was not doing his work properly. “The demand here is huge, you need to do something about it,” Sharma’s father told him.
And sure enough, Sharma is following his advice very closely.