PhonePe aims to reach 500M users by 2022, sets aside Rs 800 Cr for brand marketing in 2020
Bengaluru-based payments company PhonePe has set aside Rs 800 crore for brand marketing campaigns in 2020. This marks PhonePe’s largest-ever investment into marketing efforts to date.
The financial payments company launched its newest brand campaign, “Karte Ja. Badhte Ja.,” featuring Bollywood superstars Aamir Khan and Alia Bhatt. Moving forward, this will also be PhonePe’s brand tagline.
While speaking to YourStory, Sameer Nigam, Co-founder and CEO of PhoenPe said that the campaign and the tagline envisage PhonePe’s efforts of adding more value to its customers.
“When we started PhonePe, we wanted to build India’s largest transactional platform, anchored on payments. But over the past year, we have expanded our merchant ecosystem and are offering various financial services to our users. We wanted to convey our efforts around adding more value to customers than just payments. The purpose is to offer every Indian an equal opportunity by giving them access to financial services.”
Over the last year, PhonePe has added more used cases on its Stores platform, which acts like an ATM service that allows users to discover closest kiranas where they can withdraw cash. It has also added more consumer apps to its in-app platform, rebranding it to Switch, while making its foray into financial services and offering exclusive financial products to customers.
Further, the brand is expected to have a new logo which will be showcased on the app, Sameer added.
Along with the current campaign, PhonePe has also renewed its co-presenting sponsorship with Vivo IPL this year and plans to release two more brand marketing campaigns for this year.
In August last year, PhonePe’s arch-rival Paytm bid Rs 326.80 crore to acquire the sponsorship rights for BCCI's international and domestic matches for 2019-23 home season.
As of December last year, PhonePe had close to 185 million unique users, of which, more than 20 percent of users are from Tier-II cities and more than 50 percent are from Tier-III cities and beyond.
Further, the payments brand is also aiming to take its total number of users to 350 million by the year-end and reach the 500 million mark by 2022.
Sameer added, at present, close to 75 million of its users make more than 20 transactions on the PhonePe app which the company plans to take to 150 million. Further, PhonePe platform registers close to 600 million transactions every month which it plans to scale three times by 2020 end.
With steep targets, PhonePe seems to be relying on advertising and marketing to reach these numbers. When asked about the platform's marketing efforts moving forward, Sameer said,
“We are growing organically and can continue to do so with the hope of some virality kicking in for our platform. But we do not wish to leave any stone unturned and steal a part of our growth to, say through marketing, and reach where we want to be fast.”
However, Sameer reiterated that PhonePe is diversifying into profit-making avenues like financial services or PhonePe ‘Stores’, through the distribution fee paid by the brands. Hence, to push a user through these various consumer journeys continues to be critical for the brand.
But, is it sustainable?
A larger question looms around sustainability in growth for payment firms who are just beginning to shift their focus on building revenue-making moats. PhonePe’s competitor Paytm has been riddled with questions for years now around cash burn.
However, Sameer seemed confident about sustainability. He said,
“We haven’t launched a single cashback offer in months, and our competitors might be outspending us in that department. Our organic repeats and installs from word-of-mouth are still growing, and we have added much better technology efficiencies on our payment gateway side, as well as on the customer care solutions. Almost 80 percent more efficient than we were before. So, with resulting financial efficiencies, we don’t think we are in a bad spot.”
In FY19, PhonePe’s losses grew by 2X to Rs 1,907 crore, while its revenue grew 5X between FY18 and FY19 to Rs 245.8 crore.
However, with 30 million users per month transacting on PhonePe's revenue-generating platform including in-app platform Switch, MyMoney (which houses PhonePe's financial services products), and ATM cashout transactional service for Stores, PhonePe is confident that it will change the narrative around sustainable growth in the industry.
(Edited by Suman Singh)