SoftBank-backed Paytm and Walmart-owned PhonePe are preparing a marketing blitzkrieg to safeguard their positions as Reliance Jio, the telecom venture of India’s largest conglomerate Reliance Industries, and WhatsApp Pay look to take a bite of India’s soon-to-be USD 1 trillion digital payments market.
According to the local media Economic Times (ET), Paytm and PhonePe are planning to spend a combined USD 280 million (INR 2000 crore) on marketing this year. Both homegrown digital payment companies aim to “increase awareness, credibility, and promote products to a wider consumer audience,” the top company executives told ET.
As per the report, Paytm and PhonePe will splurge money across platforms such as advertising through television, radio, and billboards to target mass audiences, while using direct marketing through digital channels and email campaigns to drive conversion.
Paytm will shell out USD 168 million (INR 1200 crore) for advertising and brand building, while PhonePe will cough up USD 112 million (INR 800 crore). With the new marketing initiatives, PhonePe plans to add about 150 million users this year and reach 500 million user mark by 2022 from 185 million registered users at present. Paytm, which has over 350 million registered users, is also aiming for half a billion users in the same time frame.
Of the total registered users, Paytm claims to have 140 million monthly active users (MAUs), while PhonePe has 76 million MAUs. In comparison, WhatsApp has 400 million MAUs in India, and Reliance Jio has about 370 million subscribers, as per media reports.
Earlier this month, WhatsApp received the Indian government’s approval to open WhatsApp Pay for masses. The American messaging platform is now looking to expand its digital payment service to 10 million Indian users in the first phase. Although, the Centre for Accountability and Systemic Change (CASC), a think tank that had filed public interest litigation before the Supreme Court last year against WhatsApp Pay, has again filed an interim application with the apex court to seek an immediate rollback of its pilot project.
In January, Reliance Jio launched Unified Payment Interface (UPI)-powered digital payments for its subscribers. UPI is a homegrown instant payment mechanism backed by government body National Payments Corporation of India (NPCI). Jio is also reported to be working on rolling out mutual funds and other financial products this year.
“For us, a strong brand recall on trust, integrity, and innovation is important as our focus is to get at least 150 million new users through the year,” PhonePe founder and chief executive, Sameer Nigam told ET, adding the company plans to double its MAUS to 150 million this year.
Paytm and PhonePe have also geared up to onboard merchants, especially those beyond metro and tier 1 cities, which is expected to pave the way to a sustainable revenue channel. Both the payment companies hope to cross-sell financial services and products to millions of small retailers.
Paytm recently launched an all-in-one POS (point-of-sale) device for merchants to help them process all types of payments including wallet, UPI, payment cards, and cash with the aim of looping in about 10 million merchants in 2020, which would take its total merchant base to 25-26 million. PhonePe, on the other hand, is aiming to expand its reach to 20 million offline stores by this year, from the current 9.5 million.
A Paytm spokesperson told ET that its branding and marketing campaigns are designed and conceptualized “to be simple but effective so that they can resonate with our merchants and users, be it in metropolitans or small tier-III and rest of India towns.”
