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Paytm Karo!

  • Writer: Yash Mehta
    Yash Mehta
  • Jun 2, 2021
  • 3 min read

From 2000 to 2015, when we all had a mobile phone and had to recharge our mobile number, we used to buy recharge coupons which looked similar to this.

Now this has vanished completely from the cities because of different online recharge system provider. This change was brought by today's large new Fintech startups like Paytm, Freecharge and Mobikwik in early 2010. PhonePe entered little late in 2015 in this. Now even telecom operators have their own robust system to recharge mobile number online.


Only thing that remains same in life is "CHANGE". Technology is disrupting many businesses now. How our lifestyle was a decade is different from today's lifestyle and probably after a decade it will be more different.

PAYTM:


Paytm word is an abbreviation for "Pay through mobile"; now known to all Indians who are using smart phone and having internet connection. Paytm new age Fintech company and they have expanded their business in banking and retail space as well. Recently, Paytm's board has given approval for Paytm Rs 22,000 crores IPO so let's understand their business model and what are its strength, growth drivers and future opportunities that company can tap in.

Let's understand how Paytm started its business and what is its current position:


Paytm was founded in August 2010 and is a Noida based company. It started off as mobile recharge and DTH recharge platform and later added data card, postpaid mobile and landline bill payments in 2013. In 2014, it had launched Paytm Wallet, which is now one of the major payment option for the customers while shopping, booking tickets, paying bills or recharging mobile numbers. In 2017, it became India's first payment app to cross over 10 crore app downloads.


In February 2017, Paytm launched its Paytm Mall app, which allows consumers to shop from 1.4 lakh registered sellers. Paytm Mall is a B2C model inspired by China's largest B2C retail platform TMall.


Reserve Bank of India (RBI) gave license to Paytm to run a payment bank in India. In November 2017, Paytm Payment Bank was launched


Other than these, Paytm started Paytm Money which provided a platform to buy equities and mutual funds. Paytm Smart Retail and Gamepind are also Paytm products.

Key Growth Drivers:

  • Increase in smartphone users and internet access

  • Reaching out to rural population in India

  • Looking out, for opportunities in other market

SWOT Analysis:

Major competitors of Paytm:


Paytm is now diversified into many businesses, as discussed earlier. In India there are many competitors of Paytm across different business line. Every business line if I want to find out the competitors then it would like this:

  • Wallets:

    1. Mobikwik

    2. PhonePe

    3. Freecharge

  • Payment Bank:

    1. Airtel Payment Bank

    2. Fino Payment Bank

  • Payments:

    1. GPAY

    2. BHIM

    3. PhonePe

    4. Mobikwik

    5. Bank Platforms

  • Online Shopping:

    1. Amazon

    2. Flipkart

  • Brokers:

    1. Zerodha

    2. Upstox

    3. ICICI Direct

Revenues of major competitors in the same business that of the Paytm:


Paytm revenues had increased from ₹ 598 crores to ₹ 3628 crores. Growth of almost 500% in last 5 years. Competitors are growing at slower pace. For example, Mobikwik and Paytm had started in the same year 2010 but it is not able to grow as big as Paytm in one decade.


Net Profit of both the companies:


This is something that everyone knows that all this company is not profitable yet. One of the reason would be company is investing in building their IT infrastructure and in promotional activities because of which the company is not able to convert their top line: revenues into positive bottom line: net profit. This story is same for mostly all early stage startups in India.

Paytm is just like a new age Fintech company that started as recharge platform and now grown into a wallet, payment banks, online shopping and payment segment in just one decade. Company is not in net profit but still many big investors and investing firm and infusing capital into it by seeing at the growth potential in the company's future. One tagline that comes to our mind is "Paytm Karo!"


More details of Paytm will be shared once IPO subscription starts in upcoming months.

Last month we have covered industry analysis on Online Food Delivery business since Zomato has filed for its IPO. You can read it now by clicking on the highlighted text.


Thank You friends for giving your precious time in reading this blog. Don'tforget to like this blog if you find it helpful as it keeps us motivated to present more informative content like this in the future. Share this with others so that they can also understand about Paytm Business.

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