RUNNING AN EVOLVING BUSINESS
Paytm is today valued at $16 billion and is the most funded unicorn in the country. Now the ecosystem has changed, there is UPI, e-commerce, lending verticals, you have bigger competitors. What do you see as the growth drivers?
SHARMA: Now it is the big game, there is a bigger plan. Earlier it was a startup game, which had the startup plan. It is no longer a one vertical business. It is now an ecosystem war. Just like in the U.S. and China markets, where ecosystems fight, it is all about the ecosystem [in India also]; it is not about payments anymore. I believe that with payments/financial services as a moat you are very well positioned, in fact in a dominating position, and we believe that while we have the largest number of users, the largest number of transactions, and those KPIs [key performance indicators], we will also be the largest revenue and profit generator, which is where the ecosystem today is going towards.
There is still a question mark on profits; you have attracted a huge amount of funding 3 but profits are still a concern.
We are a 20-year-old company now. We, as a company, have always gone through the cycle of investment, generating cash, free cash, investment, generating cash, free cash. Right now, it is not about losses which are very high. We have reduced our costs dramatically without reducing the number of people. People costs have actually increased; the other costs have automatically optimised because our revenues have started kicking in. Right now, on a year-on-year basis, our losses will go down by at least 50%.
Has the wallet taken a back seat because of the other businesses coming in?
Paytm is a payment instrument or a payment app. Paytm is a payment app where you have a sigma, meaning choice of wallet, bank account, cards, EMI, and so on. So, Paytm consumers do not have the choice only of a wallet. We are as much a part of UPI as anybody else; actually in merchant payments we are the most dominant UPI player. When it comes to online, we dominate 70%- 80% of the market share.
The wallet has its own loyal consumer acceptance and UPI has its own loyal consumer acceptance and both will inevitably coexist.
TAKING THE LONG - TERM VIEW
What is the future of Paytm Mall?
Paytm Mall today spends about $1 million and does on an annual basis, $3.1 billion GMV [gross merchandise value]. The problem is that you have a choice to benchmark it against very clearly retail proxy business models. Ours is a clean marketplace, has a lot more legs than any other marketplace and with a lot more capital in the bank and a lot more resources committed, than anybody else in the business. Everybody else, either they will struggle for the money, or they will struggle for compliance. We have money and we are 100% compliant. For us, Paytm Mall is a journey which is not in a mature stage any which way; it is in its early days.
Some of your competitors in the wallet business are now owned by big companies. What is the future of this business?
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