[TechSparks 2020] If there are Parle G and telco connection, there should be digital payments: Sameer Nigam on conquering the heartland

Armed with its war cry to just do it ('karte ja. badhte ja,') in pandemic times, PhonePe had a record October processing 925 million transactions, its highest so far, with an annual total payment volume run-rate of $277 billion.

According to a company statement released on Monday, PhonePe also processed 835 million UPI transactions in October, for a market-leading share of over 40 percent.

At the just-concluded five-day, all-virtual TechSparks, PhonePe Founder and CEO Sameer Nigam said that they aimed to cross 500 million registered users by December 2022.

“The main target for us at this stage is not the valuation. The main target for us is doubling our consumer base and getting to 500 million users by 2022 end. So growth first, which is 500 million Indians using digital payments using PhonePe, then profitability, then IPO. The valuation takes care of itself,” he said, replying to a question on PhonePe’s valuations.

One of India’s leading digital payments companies, PhonePe has been recognised as the surprise hidden gem among Flipkartt’s group of companies, which Walmart acquired as part of its $16-billion acquisition of the ecommerce firm in May 2018.

In a fireside chat on ‘Product mindset for building for the world’, Sameer spoke about the company’s razor-sharp focus on growth and profitability, and how it is going about doing that despite the challenges thrown by the COVID-19 pandemic.

In fact, early this year, while launching PhonePe’s Rs 100 crore pledge donation drive for the PMCare fund, Sameer had spoken about how tough times call for tough measures, terming it “unnatural alliances in war times”.

“People are learning to partner with each other as opposed to competing,” he said, adding that much-needed sanity prevailed in these tough times.

“Cashbacks are coming down and people are focusing on unit economics,” he added, saying it was good to see founders focused on viable businesses.

Here are some key takeaways from Sameer's fireside chat that also include PhonePe’s strategy to go deeper into the heartland and his top three pointers for product managers while developing a world-class product.

Unnatural alliances in war times

• At the recent BigBillionDay sale by PhonePe’s parent company Flipkart, their anchor offers were led by Gpay and Paytm. That is an alliance that normally wouldn’t have happened.
• Similarly, PhonePe is partnering with a number of players such as Bigbasket (Flipkart’s competitor in the grocery segment) and Ajio (Myntra’s competitor). Everyone’s integrating with each other.

Cornering the kiranas

“For us, the mission with the kiranas and MSMEs is not to just enable payments with a QR code. That is the easy part. We’ve got to make sure we can do it all the way into the heartland. We made two deep investments. Added another 15,000 people to the fleet and went all the way into 6,000 talukas,” Sameer said about PhonePe’s strategy.

• The brief to the team is if there are Parle G biscuits and telco connection, you should be able to get digital payments.
• There is a lot of doubling down of effort on enabling value-added services and digitisation of kiranas through the PhonePe for business app.
• PhonePe has impaneled two-and-a-half million merchants to offer a reverse ATM where customers can pay them digitally and get petty cash.

“Some of these things COVID accelerated. Sheer volumes have gone up for digital payments for PhonePe at a network level. But there have also been setbacks in terms of physically helping in terms of digitising and training the small businesses and kiranas. Some wins and some temporary losses,” he said.

ALSO READ

[Watch] CEO Sameer Nigam on PhonePe's plans to dive deeper into India, way forward with Walmart

Pointers for product managers

Sameer recently joined the Mojaloop Foundation Board to advance financial inclusion. Mojaloop is an open-source software empowering organisation to create interoperable digital payment systems to increase financial inclusion across the world.

Talking about building a world-class product from India, Sameer shared a few general principles that are worth noting.

• You can buy your customers but you cannot buy repeat customers. One very important metric to look at is repeat rate and what percentage of users are contributing to your daily traffic. That is the best way to know that you are adding value to someone’s life.
• People underestimate the power of good design when they talk of product. Some of the best products are just flat out simple. For example, Zoom didn’t exist on my radar two years ago; suddenly it has 300/400 million daily active users. Easy-to-use and basic application design are very important in every category.
• You’ve got to know what scale you are designing for. In certain categories like social networks, you can go from zero to 10 million very fast. But if you have not designed for scale, you start crashing. There is nothing more heartbreaking than actually getting customers the hard way and then suddenly losing them.

“So focus on repeat, focus on a great experience, but then make sure you are set up to scale,” is his advice.

For more information on TechSparks 2020, check out our TechSparks 2020 website.  

TechSparks - YourStory's annual flagship event - has been India's largest and most important technology, innovation, and entrepreneurship summit for over a decade, bringing together entrepreneurs, policymakers, technologists, investors, mentors, and business leaders for stories, conversations, collaborations, and connections that matter. As TechSparks 2020 goes all virtual and global in its 11th edition, we want to thank you for the tremendous support we've received from all of you throughout our journey and give a huge shoutout to our sponsors of TechSparks 2020.