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MARKETING STRATEGIES OF PAYTM

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1 Chapter 1 1.1 Introduction 1.2 Literature Review 1.3 Research Objective 1.4 Industry Review 1.5 Company Review

2 Chapter 2 Research methodology and tools used 3 Chapter 3 Data analysis

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4 Chapter 4 Discussion of results 4.1Conclusion 4.2 Summary 5 Chapter 5 Research Limitations 6 Chapter 6 References ( apa style )

CHAPTER 1 1.1INTRODUCTION This project is an attempt to explain the practical implementation of the Marketing strategies that I have studied. As a student of BBA, it is a part of the fourth semester to undergo NTCC term paper project on the chosen topic. So, for this purpose I got the opportunity to do my project on the Marketing Strategies of PAYTM. The first chapter gives a view about the project and the aim of the study, and the review of the Industry and the company I have choosen. Objective of the study is to understand the marketing strategies of Paytm in India, along with other financial analysis, SWOT analysis, situation analysis, and CSR of Paytm The last part of the project explains the analysis, interpretation and conclusion of the study carried out . Every business must design a strategy to achieve goals, which is achieved through its planing and Marketing strategies. Marketing strategy is a process that makes it possible for a firm to

concentrate its limited resources to its greatest ability which helps it to increase sales and have a competitive advantage. My focus has been to know the Marketing strategies of Paytm and that I was able to achieve by the Primary data that I collected from my reserach. My medium to achieve this was through thorough research which was by many sources. The report also gives a brief view about the important factors that affect Paytm and its different strategies it follows. Marketing Strategies is a long term plan for a company to achieve its objective for a sustainable competitive advantage. A good marketing strategy is drawn from marketing research and strategic planning, and by doing a deep analysis of customers needs and wants. The company needs to find the perfect product mix for maximum profit potential. The marketing mix in marketing strategy includes the 4P’s of marketing which are Product, Place, Price, Promotion.. Further, the STP process- Segmentation, targeting and positioning helps to give an overlook of the overall market that the company shall focus on. Therefore, market strategy is the best way to identify where customer come from, who the customers are and what are the expectations of these customers.

1.2 LITERATURE REVIEW

1.3 RESEARCH OBJECTIVE The objective of my project was to study the marketing strategies, policies, financial position and different situational, and competitive analysis of paytm . The same was achieved with the help of secondary data collection, and inferences were found out on the same.

1.4 THE INTERNET INDUSTRY All companies which provide different kind and varieties of products and services which are primarily online and through websites are a part of the Internet Industry. These operations include search engines, travel services, cash wallet services, cloud storages, retailer outlets as well as dial up services and a lot more. In this industry participants don’t often compete with each. In India the E- commerce and the Internet Industry has been growing at an annual rate of 51%, which is higher than anywhere around the world. The internet economy in India is expected to reach $250 billion by 2020. Companies in this sector operate at a very high level of risk competition because of rapid change in technology. This industry offers a huge market, therefore the barriers depend upon the target market the company belongs from. Majority of the internet companies operate overseas and are big MNC’s, therefore the results often depend upon the market and currency exchange rates. The trends for internet usage have been increasing for the last decade, and the industry has seen continuous popularity as a result many companies in this industry have well-positioned base in the targeted markets. In India the cope of thus industry is vast, as the digital adoption in India has been

growing rapidly and the total number of internet users will grow by 650 million by 2020. This will provide a very large boost to

the internet economy in our country. The above chart and graph indicates the list of countries with the number of internet users in millions. India comes second at 699 million users behind China. This shows that the internet industry has been growing at a very astonishing rate. The major companies in this industry are listed below with its net worths:

USP :

payment online with high customer base and acceptance in the market

1.5 PAYTM

History It stands for “Pay through Mobile”. It is an Indian e-commerce payment system and digital wallet company which is headquartered in NOIDA SEZ, India. It is a private e-commerce company which serves India and Canada, it was founded in 2010 by Vijay Shekhar Sharma who is the CEO of the company. Its parent company is one97 communications ltd. As of January 2018, Paytm is valued at $10 billion. According to the company over 7 million people across India use Paytm to accept payments. Advertisments and paid promotional content is also used by Paytm to generate revenue. It was initially founded by Vijay Shekhar by an investment of $2 million with initially being a prepaid mobile and DTH platform and later adding data card, postpaid mobile and landline bill by 2013. They further expanded in 2014 with the help of Indian Railways and Uber when these companies started using it has a payment option in 2014. In 2015 it launched more use cases like paying of educational fees, waste bill and metro charges and further in 2016 they launched it for entertainment payment purposes for eg the payment of movie tickets , gift cards etc. They saw a rapid growth in the usage which was from 11.8 million in 2014 to 104 million in August 2015. It was India’s first payment app so it was able to capture market very fast with over 100 million app downloads. In March 2015, Paytm received funding from a Chinese company Alibaba Group, the group took 25% stake in One97 communications. It also received backing from Ratan Tata after that. Paytm for business app is also offered by Paytm for over 10 different languages. In May 2017, Paytm received its biggest funding from Softbank which also a stake in Alibaba , this further made Paytm worth for $10 billion.In 2018, Berkshire Hathaway invested $356 million for 4% stake in Paytm. The services and products offered by the company are : 1. Paytm Mail, 2. Paytm Payments Bank , 3. Paytm Money, 4. Paytm Gamepind, 5. Online shopping ,6.payment system ,7.digital wallet

The Board of Directors and Top Management

About the founder and the CEO: Vijay Shekar Sharma, 37yrs old is the founder and the CEO of Paytm, he also invests in mobile internet startups from One97 mobility fund. 1. Ravi Adusumalli, age 39, he joined SAIF in 2002 and is currently the managing partner and head of operations there. 2. Mr Eric Jing is the CEO of Ant financial, he joined Alibaba Group in 2007and acted as the Vice president for the same from 2007-2009. 3.Pallavi Shroff, is the founder and Managing Partner of Shardul Amarchand Mangaldas law firm. She payed a vital role in formulating the documents for India’s first zero piracy zone. 4 .Amit Singhal, 48, he is a google fellow and the former head of the core ranking team at google. He served there for 15years 5.Mark Schwartz, 62, is the Vice chairman of Goldman Sachs group. He has over 27yrs of experience in Goldman Sachs. 6. Joe Tsai, the executive vice chairman of Alibaba Group. H rejoined the company in 1999 being one of Alibaba’s earliest founders. 7. Kabir Misra, he serves as the chief executive officer CEO for Softbank China and India holdings.

Investors in Paytm

Entities

Share (%) Before

Share (%) After

Alibaba & Alipay

Nil

40%

CEO

35%

22%

SAIF

50%

33%

Other Investors

15%

5%

The organisational chart of Paytm

All the management activities and reporting is done to the CEO of Paytm, Mr Vijay Sharma

The Employee Strength of Paytm As of 2018, the employee strength of Paytm is 4,959 employees. The Employee rating of paytm is 3.5/5 (which includes the work experience and work environment)

Reserve Bank and Paytm Paytm had to ask for the official operating license from the Reserve Bank Of India for starting India’s first payment Bank. Paytm has to be issued this license so that it can further offer new services such as debit cards, savings accounts, etc. The future shall allow Paytm debit cards on the go for its consumers.

CHAPTER 2 : RESEARCH METHODOLOGY AND TOOLS USED

1.Secondary data is the data which is already available and in this research secondary data was used. This data was collected from both published and unpublished sources. 2. The published data was obtained from the Annual report which was publicly available of the company, the various publications of different newspapers and foreign bodies along with the subsidiary organisations. 3.Technical journals were further used to collect the data. 4.For the financial information various stock exchange websites were used to help derive inferences. Public records of the company along with historical documents and unpublished biographies on the company were used to gather company information. 5.The data was collected from authorised sources only and it was as recent as possible. This allowed no space for being bias.

CHAPTER 3 : DATA ANALYSIS

The Challenges faced by Paytm 1. Inertia in Adoption : Concerns regarding security, privacy, and transparency is still very apparent among majority of the users even though the penetration of digital payments has been increasing, these concerns are a major drawback. Also India has been a cash transaction dominated market, so Paytm has to fight this through continuous product improvement and overcome this barrier 2. Transaction Glitches : Glitches occurring in the Paytm app due to the software programming hampers the transactions sometimes and this can be overcome by bug fixes that Paytm keeps on offering to its users 3. Risk of security breach and fraud : Maintaining privacy and security of consumers has become an important challenges as large amount of data is collected and stored by Paytm. Ensuring the security of the technological system becomes the key factor. The risk of financial loss becomes a major question for the consumer and the adoption of Paytm technology 4. Competition from Debit and Credit cards : Mobile wallets face the biggest challenge from credit and debit cards. Cards have wider limits then mobile wallets, this gives card a greater advantage over Paytm wallet 5. Issues with Compatibility : The app sometimes may not be compatible with some softwares and operating systems, this makes it inconvenient at times. 6. Impact of UPI : It is the long run challenge that Paytm will have to face along with all its competitors. The introduction of UPI may lead to some future cannibalisation for these companies. 8. Moving beyond core services : Continual challenge will be to adapt business models to consumer needs and differentiate products from alternatives including UPI

Growth Strategy of Paytm

1. Using digital marketing : After demonetisation, E-wallets, online transactions, net banking became very popular among the population. Paytm used this has an opportunity to increase the companies shares. This demonetisation period became a great push factor for Paytm, it was observed that after that period 1 million people got themselves digitalised. 2. Issue of Reliability : E-transaction wasn't a new concept but it was not considered to be reliable, this issue is still ongoing in the market but Paytm became the first of all the other companies who failed to get it perceived has a reliable source of payment and transactional service throughout the country 3.

360 degree campaign : They made sure that there idea of online payment reaches everyone through social media. So, they used platforms such as Facebook, Twitter, Instagram, Snapchat to reach audience of every age and gender.

4. #Paytmkaro : There most effective strategy so far has been the hashtag of Paytmkaro on social media, at the initial stage of its adoption it was being added to almost every conversation on Facebook and Twitter. All the feedbacks and complaints were observed through this strategy afterwards. This strategy had no initial budget. 5. No more hunger pains on the train : It tied up with IRTC’s e-catering which allows users to book meals on the go in trains. India’s majority of the population uses train as a medium of transport. 6. Offering huge discounts : Certain codes are provided to the consumers on different basis which can be redeemed till a specified date, which indirectly killed the other competition and has helped paytm vastly to penetrate the market .

Financial Analysis of Paytm 1. Paytm reported loss od Rs.1490 crore in 2017-2018 but with quadrupled revenue at a staggering Rs.3,314 crore. Total expenses doubled at Rs.4718 crore, this was because of increasing employee and finance cost. 2. The financial position of the company for the fiscal year 2017 stood at revenue of Rs.814 crore. For the year 2016-2017 the new worth of the company stood ta Rs.2,376.6 crore according to business information forum- tofler. Paytm has not officially disclosed if it has made a profit/loss during this year and nor has it given any comparison with the previous year .The predicaments is that it stood at a loss of Rs.879 crore 3. Paytm financials and one97 revenue was ta Rs.337 crore with a loss of Rs.372 crore in the fiscal year 2014-2015. Rs.4383 crore was raised by Paytm during this time. During this time the company was offering a wide variety of services and expanding its business. They had 50,000 merchants at this time and75 million orders were being processed in a month. They had witnessed a growth of 60% from a revenue of previous year of Rs. 210 crore in the previous financial year which has a profit of Rs.6 crores

The advertising and promotion expense of the company was 57.8% of its total expense, which rose by 1100% from the previous year

The Competitors of Paytm The four main competitors of Paytm are : 1. Freecharge : It was acquired by snap deal in April,2015 and had since then been used to make transactions between snap deal and free charge. It also gives free coupons so its preferred among users 2. Mobikwik : This app lacks in many features but provides the best user interface. The major benefit the app provides is 0 transaction cost from bank. It can also be used to pay across various platforms. 3. Airtel Money : Used as wallet for payment, it was made to support the governments cashless initiative and since then as introduced numerous products and services jio 4. JioMoney : #Indiakanyacash is the hashtag they use. Its supposed to make smart, simple and accurate secure digital payments.

Market Share of Paytm For 2017 data : It acquired a market share of 67%. This share has increased after demonetisation when Indian Government made it their mission to move towards a cash less economy. In 2018 : It topped market share with over 33% market share of UPI payments.

HR and other important policies and strategies

1. The company Paytm is tech savvy company and such companies believe in hiring people and providing truing according to the requirements of the company. they provide them with a comfortable workplace so the employees retain for longer period of time. 2. Human Resource Policy of Paytm are flexible, the company does not encourage non flexible policies as this doesnt let the workforce be energetic and motivated which is important for the growth of ay company. 3. Company provides its employees with an open culture which help its employees to share ideas and opinions among each other and the manager. The department ensures cross training courses make sure the employees are motivated and they get interesting roles and jobs every time. 4. The most recent initiative of Paytm HR depart has been to measure the satisfaction of its employees by asking for feedback and their experience at Paytm, which will further help them to improve the wrong environment of the company. 5. The company has many employee favourable policy, e.g. it allows an employee to rejoin if he/she has to take leave for any personal reasons. It also provides perks such as various tickets to shows, Medical insurance, team outings etc. This enables the commitment of the employee. 6. The company has always expected ethical and professional behaviour from the employees where they are representing the brand. The employees must fulfil these standards and job requirements by undergoing any on the job training required from them. 7. Paytm has a Global Recruitment Program : The brand is planning to recruit talent from across the globe, they have always believed that all their achievements have been possible due to a strong workforce

Situation Analysis The mission : To bring had billion people to use Paytm by 2020 The values : Speed, Ownership, Integrity The vision : “ A company is worth the company it keeps”

SWOT analysis of Paytm Strength of Paytm 1.

It has first mover advantage : They got popular during the time of demonetisation when the government encouraged a cash less economy and Paytm also established itself during the time when mobile phones were becoming popular which gave it a first mover advantage.

2. Convenience option : It is workable 24x7 and gives easy transfer of funds services and much more which makes it increasingly accepted by the urban population. 3. Tie-ups with merchants : It is used by more than 3 million merchants across India and the people who are joining Paytm increases everyday. It makes Paytm a very easy shopping ground and other uses.

1. Bucket of services : It has numerous services, in addition to Paytm wallet it also offers online retail, recharge, and many other Paytm gateways through different networks. 2. Offers : It has a never ending offer stream which makes it customers never loose attention from the app. These offers are custom designed with the Indian mindset. Weakness of Paytm 1. Need for IT infrastructure: It needs to have a robust bandwidth and speed. This is not the case for remote locations or even tier 2 towns. 2. Lack of awareness amongst users: Users are unaware of what Paytm can do and are confused how to use the app. The fear of making erroneous transactions makes it worse. 3.

Fear of going cashless: India is cash dominated and being adapted to cashless systems is taking time. However, with digitization and demonetization, things are expected to pick up

4.

Poor customer care: Paytm is criticised over bad customer service and call centres are said to be pretty rude in many matters

Opportunities of Paytm

1. Growing demand for aggregators: Increased technology usage makes people prefer to make payments from their homes.This has increased the role of payment as middlemen. 2. Demonetisation: Paytm was one of the biggest beneficiaries of demonetisation for moving towards cash less economy. 3. The surge in the number of working professionals: The increasing demand for online shopping increases the payment portals as well.

Threats of Paytm

1. Competition: The internet industry is vast and there are many companies which offer the same service has that of paytm for eg, jiomoney, mobikwik etc 2. Growing concerns about safety: Threat to privacy and transition protection and leaking of personal data become a threat to Paytm

Marketing mix Product : It is an alternative for hard cash. Paytm offers its users many services and as the name suggests its made itself accessible through smartphones. It also provides banking services Price : It provides free of charge service to its customers. Paytm has many competitors but no other company captured the market share like Paytm did.This therefore, can be a result of there marketing strategy. They have the earnings from transactions fees and the commission on these transactions. Place : It can be accessed anytime and anywhere using active internet connection and smartphone. This system of Paytm is accepted everywhere around India. Promotion : It has promoted its services through campaigns, billboards, social media, newspaper, TV ads, etc. Besides other strategy like that of #paytmkaro. It partnered itself with cricket which helped in publicity

Corporate Social Responsibility of Paytm Paytm has stood for many social cases which has helped improve the societal situations in many cases, the below listed are some of the campaigns Paytm has stood for over the years : 1) Donation to Bhopal gas tragedy survivors : This campaign happened from 1st to 9th December. Its users and participants donated coupons during the recharge orders. These coupons ranged from rs.50, 100, 200, 250, 500. The funds that got collected where donated to Bhopal medical appeal which helped the survivors ultimately 2) Blanket donation drive : This was conducted by Paytm during the cold of December,2012 where blankets were collected and distributed to the streets through a donation drive 3) E-waste management : Carbon credit system its used by Paytm for its E-waste management, this reduces the carbon footprint. This system enables Paytm to give out its old commuters and servers to a licensed company in exchange for credits. This company further breaks the E-waste int re-usable components. This step helps them to go green 4) Awareness generation of water, electricity, and paper wastage is generated by having water sensors in offices, sensitising people and switch off lights and enabling the use of solar panels and natural light 5) J and K flood campaign : Rs. 33,60,468 was donated to the prime ministers national relief fund during 2014 floods 6) Republic-Day Campaign for the underprivileged soldiers & families : On 15th August a part of profit is contributed to supporting disabled children and widows of the Indian army 7) Uttarakhand flood campaign : Rs.2009931 was donated to the chief ministers relief fund to help flood victims in 2013 tragic floods 8) Diwali campaign for the blind : During this time, the profits for 2 days are given to the national association for the blind to light up the world of young children.

CHAPTER 4 : DISCUSSION OF RESULTS 4.1 CONCLUSION

4.2 SUMMARY

CHAPTER 5 : RESEARCH LIMITATION

CHAPTER 6 : REFERENCE