Looking to add two new key merchants every quarter, PhonePe is taking the inorganic route to get into food delivery, groceries and other categories.
On Wednesday, Flipkart-owned payments platform PhonePe launched its in-app strategy with an integration with bus ticket booking platform redBus.
In a statement, PhonePe said that this is a part of PhonePe’s vision to enable businesses of all sizes to build and deploy apps on its platform with a unified login and payments experience for customers.
Further, this gives the online merchants an opportunity to reach out their services to 65 million PhonePe users.
Speaking to YourStory, Vishal Gupta, Head of Product at PhonePe, said,
“The basic idea is to focus on the open-source approach, and get more businesses on the PhonePe platform. We are building towards getting more and more businesses to come on board and take the partnership route.”
Commenting on why the company is taking the partnership (inorganic) route of expansion, he said,
“We would rather want the category leaders to focus on their core of building great customer experiences on the platform, while we will take care of transactional management, which is our strength. Also, this strategy gives online merchants the leverage to use other payment methods on the platform, which we have been partnering over time.”
Earlier this month, PhonePe announced a partnership with Freecharge to introduce the Freecharge wallet within its app. In a similar partnership, the company had introduced JioMoney wallet on their platform.
Apart from travel and ticketing, PhonePe is aggressively looking to introduce other verticals like groceries, entertainment, food delivery amongst others.
But an interesting point to note is whether PhonePe will be looking to collaborate only with select category leaders or will it go all out?
To this, Vishal comments that at present the short-term focus is to make as many categories live as possible on the platform, through partnering with various category players.
However, the company states that they may take an organic route of building verticals internally if they don’t see a strong vertical leader in that category. To give an example, PhonePe launched its Gold category just last month.
After which the focus would be on getting more and more players on-boarded. He adds,
“But the long-term aim is to not just work with online merchants but also to get offline players who want to get an online presence. The idea is to encourage businesses to get online and cover large set of used cases for our customers.”
This would mean that offline chains are also in the plans to be integrated onto the platform.
Keeping this in-app strategy in mind, at present, PhonePe is adding close to two key merchants on their platform every quarter.
The company also accepted to receiving commissions from these merchants for the business generated on their platform.
The ‘Super’ app way
Increasingly, payment giants in the country have been building full-stack solutions adding more verticals and services to their platform.
Commonly known as ‘Super-apps’, Chinese giants like WeChat and Alibaba have successfully in the past demonstrated the viability of this business.
Closer home, Alibaba-backed payment major Paytm had also forayed into introducing more services like movie ticketing, travel and introduced even car purchases on their platform.
However, for most they have taken the organic route, building these verticals in-house. And now Flipkart-backed PhonePe is also trying its luck with the same.
The twist being they would continue to look at the partnership route to avoid competing directly with the vertical leaders.
Tarush is driven towards delivering unbiased and accurate reportage while engaging with as many mediums as possible to narrate a fresh perspective. Working for the past few years in the digital space with YourStory, he has covered the Indian technology ecosystem extensively, focusing on new age Fintech companies, while building strong connects within the industry.