 "Our competition is doing a disservice to the ecosystem: Bipin Preet Singh")
MobiKwik Chief Executive Officer Bipin Preet Singh tells Patanjali Pahwa that his company is looking beyond payments, but will never get into the game of adding more transactions by selling everything. Edited excerpts:
Paytm measures by number of users, Freecharge by transactions a day. What is MobiKwik's metric?
We measure ourselves by transactions a day, too. We do 500,000 transactions a day. But, we have 31 million wallets along with 25 million cards and 100,000 merchants, and these are our metrics as well.
We've 40 per cent active users. I don't know about others, but we measure active users as those who use the wallet once in six months. I don't think anyone can claim they have 40 per cent monthly active users. I seriously doubt it. The media shouldn't believe all the numbers thrown around. It is good for attracting attention but damages the ecosystem. A lot of numbers being reported [by competition] are misrepresented.
What is the plan going forward? How will you claim market share? You're still second in the game…
I don't think the Indian payment market deserves a company that bleeds thousands of crores a year, which Paytm did last year. It is a different way of building a business. They are building a brand for selling everything. It is a recall game for them. Ours is different, we want to build a smart company. We have done it with fewer people, at a lower cost and by focusing on the product. Our model is to be patient and build real value and not just offer discounts and cash-back. Today, our competition is doing a disservice to the ecosystem. Everybody now associates wallets with cashbacks. They say: Those guys give cashbacks, why can't MobiKwik.
But cashback is the game right now. You do it too.
It is, but nobody can sustain it. Not even Alibaba! They can't do it, they won't do it. No investor in the world wants to do it. For a low-margin business like payments and if you want to turn profitable, ultimately you will have to stop cashbacks. We're changing that. We offer cashbacks in a different way. We won't offer it on every transaction, but if you do three transactions with a merchant, we will give some back. If you want a cashback on every transaction, you are not a user that MobiKwik can sustain.
What is your goal?
Our goal is to get to 150 million users. It will take time. It won't happen next year, maybe in two-three years. Whatever number of active users Paytm claims to have and the number of active users we have, it doesn't matter, because we all know that the big inflection point is still to come. Maybe Reliance Jio can bring it forward, maybe not. We have accessed just four-five per cent of the market today. We have to get to 30 per cent.
How will you evolve?
We are looking beyond payments. I ask myself, is this app enough if it helps me make payments. Or, can it go beyond that and add more value? That is why we are introducing the concept of loyalty. We tied up with ICICI and State Bank of India and now you can convert points into rupees on MobiKwik. So, that's adding value to the product compared to just giving out money for free. We are also working on unleashing deals. We give localised deals for customers, who can use the wallet to get good offers. We have a few live in Bengaluru and Gurgaon. The best part is that all these deals are run by merchants. We make more money there than payments. In payments, if we make two per cent, we make 10-20 per cent here. We are also trying to get more data. Currently, we don't have SKU (stock keeping unit) level data. We know you buy pizza, but not which pizza. We want to know that. Merchants are very keen on this data and then you can do targeted advertising, similar to Facebook. And we can, of course, start lending. This data can be used to offer financial products such as insurance, too.
Will you just stay with fintech services?
We won't stick to just fintech services either. Payments will be our core layer and we will add more services, which could be non-fintech, too. We will never get into the game of adding more transactions by selling everything. Frankly speaking, to sell everything you need money. Right now the problem in India is that you see so many companies that have capital and they try everything. It is because the growth being demanded of them isn't happening or isn't happening at the scale that was promised. If you start doing everything, what is the differentiator? What is the difference between a Flipkart or a Paytm or Olx? India is a long story. If you can be patient, you can build a really valuable business. And I don't mean valuation.
Paytm measures by number of users, Freecharge by transactions a day. What is MobiKwik's metric?
We measure ourselves by transactions a day, too. We do 500,000 transactions a day. But, we have 31 million wallets along with 25 million cards and 100,000 merchants, and these are our metrics as well.
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How many active users do you have?
We've 40 per cent active users. I don't know about others, but we measure active users as those who use the wallet once in six months. I don't think anyone can claim they have 40 per cent monthly active users. I seriously doubt it. The media shouldn't believe all the numbers thrown around. It is good for attracting attention but damages the ecosystem. A lot of numbers being reported [by competition] are misrepresented.
What is the plan going forward? How will you claim market share? You're still second in the game…
I don't think the Indian payment market deserves a company that bleeds thousands of crores a year, which Paytm did last year. It is a different way of building a business. They are building a brand for selling everything. It is a recall game for them. Ours is different, we want to build a smart company. We have done it with fewer people, at a lower cost and by focusing on the product. Our model is to be patient and build real value and not just offer discounts and cash-back. Today, our competition is doing a disservice to the ecosystem. Everybody now associates wallets with cashbacks. They say: Those guys give cashbacks, why can't MobiKwik.
But cashback is the game right now. You do it too.
It is, but nobody can sustain it. Not even Alibaba! They can't do it, they won't do it. No investor in the world wants to do it. For a low-margin business like payments and if you want to turn profitable, ultimately you will have to stop cashbacks. We're changing that. We offer cashbacks in a different way. We won't offer it on every transaction, but if you do three transactions with a merchant, we will give some back. If you want a cashback on every transaction, you are not a user that MobiKwik can sustain.
What is your goal?
Our goal is to get to 150 million users. It will take time. It won't happen next year, maybe in two-three years. Whatever number of active users Paytm claims to have and the number of active users we have, it doesn't matter, because we all know that the big inflection point is still to come. Maybe Reliance Jio can bring it forward, maybe not. We have accessed just four-five per cent of the market today. We have to get to 30 per cent.
How will you evolve?
We are looking beyond payments. I ask myself, is this app enough if it helps me make payments. Or, can it go beyond that and add more value? That is why we are introducing the concept of loyalty. We tied up with ICICI and State Bank of India and now you can convert points into rupees on MobiKwik. So, that's adding value to the product compared to just giving out money for free. We are also working on unleashing deals. We give localised deals for customers, who can use the wallet to get good offers. We have a few live in Bengaluru and Gurgaon. The best part is that all these deals are run by merchants. We make more money there than payments. In payments, if we make two per cent, we make 10-20 per cent here. We are also trying to get more data. Currently, we don't have SKU (stock keeping unit) level data. We know you buy pizza, but not which pizza. We want to know that. Merchants are very keen on this data and then you can do targeted advertising, similar to Facebook. And we can, of course, start lending. This data can be used to offer financial products such as insurance, too.
Will you just stay with fintech services?
We won't stick to just fintech services either. Payments will be our core layer and we will add more services, which could be non-fintech, too. We will never get into the game of adding more transactions by selling everything. Frankly speaking, to sell everything you need money. Right now the problem in India is that you see so many companies that have capital and they try everything. It is because the growth being demanded of them isn't happening or isn't happening at the scale that was promised. If you start doing everything, what is the differentiator? What is the difference between a Flipkart or a Paytm or Olx? India is a long story. If you can be patient, you can build a really valuable business. And I don't mean valuation.