PhonePe is one of India’s biggest mobile payment companies. It was launched in 2015 and its growth has been exponential over the last 4 years. PhonePe and Paytm (leading mobile payment player in India) have had similar growth paths but in comparison PhonePe has done well to gain market share. This can be attributed to the strategy that the company had adopted in recent years. Both the players have focused on creating in-app applications to increase transaction value. However, PhonePe took the route of forming partnerships, while Paytm decided to build its games from scratch. Also, PhonePe preferred to monetized its user base through in-app purchases made, while Paytm offered rewards and discounts to get more transactions being done.
PhonePe has focused strongly on turning its user base into profits by using them to sell other services and products and the company’s affiliation with ecommerce company Flipkart (owned by Walmart) was a plus on their side.
According to PayNXT360, PayTM continued leading the mobile wallet market with a 30-35% share in value terms by end of Q2 2019. Google Pay ranked second with a 20-25% market share and Phone Pe had a 15-20% market share.
Product promotion does not miss in the strategic expansion of any company and PhonePe has done its share of this as a move to cut the competition posed by other mobile wallets such as Paytm and Mobikwik. This involved giving deeper customer integrations, discounts and promotional offers. This move was possible and helped by the fact that the company had received surplus financial backing from its parent Walmart which sees it as a strategic tool for its dominance in India. This move has yielded and continue to be a great source of its user base over the last 4 quarters.
Another strategy was partnering with retail outlets around the country such as Mother Dairy, MedPlus, McDonald’s, Apollo pharmacy and Metro Cash and Carry among many others. What made this strategy attractive to many outlets to partner was the fact that within the PhonePe app mini platforms were created for each business and no other competitor had offered.
It was the unique platforms that PhonePe built within its apps that allowed different businesses to have an exclusive space within the app. Recently, it has made a partnership with Payswiff, a payment transaction provider, which will allow it to acquire Payswiff clients. PhonePe-Payswiff deal is quite similar to the agreement made between PhonePe and Naspers-backed payment technology company PayU in September 2018 whose aim was to expand its online merchant base.
PhonePe has been focused on the Indian market, unlike its competitor Paytm, which has started expanding outside the country.
A recent move of the PhonePe company has been targeting sports betting segment. PhonePe is branching into this sector as a move targeted to increase its user base. This move has seen PhonePe become the broadcast sponsor for IPL. PhonePe has also partnered with Mobile Premier League (MPL) and now allows its users with the inn-app installed to access and play fantasy cricket game.
PhonePe is currently looking at new categories that are likely to keep the user engaged with the activities and content within the app. This includes news, and video streaming, both Indian and western content.
To know more about changing mobile payment market dynamics in India, click here.