Do you have a Paytm wallet account? Well, if you don’t, you are missing out on the benefits that 300 million people are leveraging every day!
But sometimes, everything isn’t the same in the inside as it appears from the outside. For Paytm, even after its huge user base, it has not been experiencing a smooth ride for quite a few days, with all the scams and low profitability, not to forget the PIL filed recently against it in Delhi High Court.
When, on one hand, these misfortunes doesn’t seem to take a pause while on the other hand, the Paytm Mall is hanging by the thread as rumours have flooded in that the current COO of Paytm Mall is planning to quit.
The largest gain in profitability for Paytm was during the time of demonetization. Paytm at that time, flourished its business at a very high rate and due to it’s then competitors, MobiKwik and Freecharge not being strong enough, its path of dominance in the digital cash business was cleared.
As the momentum of demonetization reduced and people once again turned to the cash mode, Google Pay and PhonePe used it as a great opportunity. With simple UI and UPI ecosystems, Google Pay outnumbered Paytm big time in 2018, while PhonePe did the same this year.
Paytm shifted its focus from consumer-facing business to e-commerce business, in other words, Paytm Mall. Due to this many employees have already left Paytm and there are reports of former COO of Paytm Mall, Amit Sinha and the current COO of Paytm, Kiran Vasireddy, to leave the company.
Earlier this month, Bhushan Patil, a senior leader responsible for boosting Paytm’s cross-border business resigned. Alibaba Group’s senior director Bharti Balakrishnan, leading fashion and kitchen categories at Paytm Mall, also stepped down.
The business model of “cashback on transactions” isn’t working anymore for the company and cashbacks were the only unique proposition Paytm had to offer to its consumers, hence the loss in confidence among consumers.
Both Paytm and its e-commerce business, Paytm Mall has been observing a decline in their profits for quite some time now, almost 3.45% in last year. Due to this, the company’s largest investor, Alibaba Group Holding Ltd., is not ready to invest in the company any further.
The fundamental need for Paytm at present is a sustainable product-market strategy which can bring back its profitability. It needs to gain control over its inventory, logistics, and management which was the sole reason for its poor traction.
Let’s just hope that Paytm comes out of its dark phase and this time with a solid plan and a unique offering for all its customers.