 "Paytm reaches for the cashless crown")
Safe and easy was for long Paytm's mantra for winning over consumers. But then the mobile wallet firm, now also a payments bank, sought mass market fame for its brand of anytime money and turned to the tried and tested planks of entertainment and cricket to widen its reach and diversify the profile of its users. However, the growing clutter in the wallets category and the aggressive marketing and branding being done by banks could prove to be its biggest challenge.
There are close to 40 mobile wallets in the country currently and almost every bank has one or is planning one. For a country where just 10 per cent of total transactions are cashless, such a wide choice is not only confusing but can even be a deterrent to the newly converted wallet users. Besides Paytm's growth thus far has been fuelled by its early-starter advantage and smart alliances; a tie-up with Uber accounts for a sizeable portion of the user base.
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The brand clearly needs to widen its appeal. And to do that it has planned close to Rs 500 crore worth of investments in cricket, it already has the title sponsorship for matches to be played at home for the next four years and is upping the advertising budget, especially for television and offline media
Shankar Nath, head-marketing, Paytm explained that even though they started as a young aspirational brand the focus has now changed to making it a household name. "Till last year we were well known on the digital space but we realised that we need on offline reach as well, if we want to expand our footprint into every household. And therefore to make it a national level mass brand we are now relying on sports and Bollywood."
Crowd appeal
A pre-paid payment issuer, Paytm, has a user base of over 120 million customers, the largest user base in the mobile wallet category today. It has also tied up with over 20,000 merchants that accept payments via mobile wallets. Paytm, run by One97 Communications Ltd in which Chinese e-commerce giant Alibaba has a stake, believes it has got here on the strength of its easy to use app and of course, smart communication. It believes that it also owes its success to a strong set of 'used cases' (payment alliances) for consumers across age groups.
Also, Jagdeep Kapoor, chairman and managing director of Samsika Marketing Consultants said, "The first phase of communication has picked up well. It has got some things spot on. For one, phonetically the brand has a good recall since it rhymes with ATM. Also, the television communication has focussed on the ease of use irrespective of the background of the person."
The alliance with Uber has paid off handsomely but it could also limit the brand's potential by restricting its usage to the urban youth. Perhaps that is the reason why Paytm is re-crafting its branding and communication strategies.
The main target continues to be the sub-30 year old who is already familiar with the brand. But Paytm now wants to be more popular with a larger section of the target population spread across a wider geography. And the brand hopes that cricket and Bollywood will propel its journey. Paytm, has already acquired the title sponsorship rights for India's matches at home for a period of four years for about Rs 203 crore. However, the management believes that the total outlay on sports marketing will be higher and the company may end up investing over Rs 500 crore in the next four years.
The brand has also started tapping the television advertisement route because as Nath said, "We need to be where our consumers are and therefore we have been focusing on being as aggressive on the offline medium as we have been on the digital front." The brand is also associating itself with mobile recharge services, travel purchases and utility bill payments.
Diving in deep
As a payments bank, Paytm wants to reach into the hinterland, where the base of small deposit holders is likely to be larger. "We are already present in the sub one lakh town but we want to go down further to areas with even less than 10,000 people and that is where television plays in a crucial role," said Nath.
Going into semi-rural and small towns is critical for Paytm, not only because it needs to establish itself as a payments bank, but also because it faces stiff competition in the mobile wallets space from banks and telecom companies. The banks lack the first mover advantage, but since they can offer a wider array of services such as opening a recurring deposit and maintaining records of past transactions, their wallets are expected to attract many, believe bankers and experts.
Nath said, "We want to be a substitute for cash, that is our biggest problem and not other mobile wallet players." But, the banks have the advantage of already being present in the hinterland and (in most cases) having the trust of the people. Kapoor said, "The next challenge will be to build trust. This will happen as people use their services." But he believes that bank wallets are not a threat because, as a specialist in the category, Paytm has the edge. Can it hold on to that?
