Published on September 23, 2016
1. PAYTM V/S SNAPDEAL -Mehul Kothari Adani Institute of Infrastructure Management
2. PAYTM • Paytm is an Indian e-commerce website headquartered in Noida, India. • Paytm was launched in 2010 as a mobile recharge website and adds to the industry of FinTech in India and owned by One97 Communications. • The firm started by offering mobile recharging, adding bill payment and e- commerce, with products similar to businesses such as Flipkart, Amazon.com. • Paytm is an acronym for “Pay Through Mobile” with Android, Windows and iOS apps,etc. • Within a span of 3 years, the company created a user base of 25 million wallet users and 10 million app downloads. • India's largest mobile payment service platform with over 40 million wallets. The service became the preferred mode of payment across leading consumer internet companies such as Uber, BookMyShow, MakeMyTrip.
3. SNAPDEAL • 2010, Kunal Bahl and Rohit Bansal wanted to start their own business, they chose an offline couponing business and named it Money Saver. • 15000 coupons were sold in three months. • Inspired by the success of Alibaba.com, founders wanted to create something on similar lines. • In September 2011 to become an online marketplace. It started as a member only website which gradually kept on growing to become the largest online marketplace in India. • Snapdeal is now offering an assortment of 12 million+ products across diverse categories from over 150,000 sellers catering to a user base of 25 million members. • Snapdeal has recently acquired Freecharge and entered into market of wallet and recharge.
4. Snapdeal Fashion Home & kitchen Daily needs Electronics Sports & fitness Motors & accessories Real estate & financial services Books, music & media Freecharge Mobile recharge Gas bill Electricity bill DTH recharge Paytm Mobile recharge Gas bill Electricity bill DTH recharge Education fee Fashion Book Online hotel, rail, flight ticket Financial services electronics
5. Vision & Mission Statement of Paytm & Snapdeal Paytm • Vision :- "A company is worth the company it keeps." - Vijay Shekhar Sharma. We are on the road to making an enormous impact to the economic foundation of the country. We want millions to accompany us and benefit from this journey. We want to make a positive difference by empowering the lives that we touch • Mission :- 100 Million user product from India. Snapdeal • Vision :- To create Indians most powerful digital commerce ecosystem that creates life changing experiences for buyers and sellers • Mission :- Aims at making life fun for consumer. We have a simple philosophy we just do not offer best price we offer great experiences ! You do not need to spend a fortune to enjoy what you love we are just a click away.
6. Segmentation & Targeting Segmentation: • Snapdeal and Paytm has done very broad segmentation by grouping people, who have internet access into one segment. There are other parameters for segmentation based on demographics, location, psychographic and behavioral pattern of people. • Demographic segmentation • Geographic segmentation • Psychographic segmentation • Behavioral segmentation Targeting: Some of the strategies followed are: • Large base of internet users easily reached via Customized email based on historic data Social media Online advertisements Word of mouth • Use of mobile apps to increase customer base • Target people relying on internet for shopping • Increase target market by partnering with corporate house for bulk selling. • Target small and medium enterprises to showcase their product / service online for greater visibility.
7. Paytm FUNDING: Paytm got a major boost in e-commerce when Indian industrialist Ratan Tata made personal investment in the firm in March 2015. In the same month, the company received a $575 million investment from Chinese e- commerce company Alibaba Group, after Ant Financial Services Group, an Alibaba Group affiliate, took 25% stake in One97 as part of a strategic agreement. PARTNER: Paytm works with all mobile operators in all states in India for prepaid mobile, DTH and Data card recharges and postpaid mobile, landline and Data card bill payments. Its partners with the multiple national banks, for credit card, debit card and net banking payments. Pay tm also works with various billers for utility bill payments.
8. Snapdeal Funding • In January 2011, Snapdeal received a funding of $12 million from Nexus Venture Partners and Indo-US Venture Partners. • In July 2011, the company further raised $45 million from Bessemer Venture Partners, along with existing investors Nexus Venture Partners and Indo- US Venture Partners. • Snapdeal then raised a 3rd round of funding worth $50 million from eBay and received participation from existing investors including Bessemer Venture Partners, Nexus Venture and IndoUS Venture Partners. • Snapdeal received its 4th round of funding of $133 million on Feb 2014. The 4th round of funding was led by eBay with all the current institutional investors, including Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital. • Snapdeal received its 5th round of funding of $105 million in May 2014. The 5th round included investments by Blackrock, Temasek Holdings, Premji Invest and others. The round valued Snapdeal at $1,000,000,000. • Snapdeal received its 6th round of funding in Oct 2014 from Softbank with investments worth $627 million in fresh capital. This made SoftBank the largest investor in Snapdeal. • Snapdeal raised $500 million in its 7th round of funding in August this year from Alibaba, Softbank and Foxconn.
9. PESTEL analysis Political:- Government support for increasing internet penetration in India. • Tax benefit to corporate , in 2012 increase in stock holding percentage for foreign investors and company • Resistance agents foreign retailers Economical :- Booming Indian economy • Increase in spending power • Sky rocketing fuel price • Base of internet users multiplied by 10 to 12 times in last 6 years Social :- Better comfort level and trust in online shopping • High priority on time and convenience • Improving use of broadband and computer literacy • Increase in costumer preference for mobile / online shopping.
10. Conti…. Technology :- Advent of mobile shopping • Increase in penetration rate of broadband and wireless internet • Better manage ecommerce site for easy, privacy and advancement in net banking. Environmental:- Encourage conservation by optimally planning delivery routes to reduce fuel wastage. • Snapdeal attempts to make its warehouses more energy efficient by consuming power through solar panels. Legal:- Some buyers buy their own product in order to show demand of their effect and hence increase the price, some start charging unreasonable high price. • Duplication of product may lead to legal litigation.
11. Working & Technology Model of Paytm/Snapdeal
12. RBV & MBV Paytm • Resource Based View (Snapdeal) -Snapdeal Cirrus(Open stack Cloud based own IT platform) -Discounted prices of Products -Vulcan Express Logistics( with other warehouses) -Trust Pay Market Based View -Online Retailing Snapdeal • Resource Based View (Paytm) -Oracle Fintech software -Cashback and offers -ekart solutions -Paytm Payment Gateway Market Based View -Paytm Wallet
13. •Strategic goal setting and achievement • Out-of-the-box thinking in business line • Constant innovations and good branding • Vast network of retailers across nation • Excellent service through convenient processes • Wide range of deals and transactions to choose. • Good funding received from time to time as the company grew • Services not available in all cities • Dependency on internet only • Technology led model might collapse if the logistics network is not trained constantly • Small time entrants entering into market share end up as competition. • Customers are already finding Flipkart faster by a day or 2 due to its inventory based model • The markets devoid of internet • Customers unwilling in online shopping can be persuaded • Partnerships with bigger corporate houses for bulk selling • Rural Indian untapped market • Tier 2 & 3 Cities focus • MOBILE revolution hitting new figures every year. • Can be subjected to frauds • Risk of being involved into selling of illegal entities • Newly emerging competitive online shopping portals • Threat of Wal-Mart making an entry in India • Threat of the world leader in e-commerce Alibaba.com making an entry in India • Ever changing tax structures and policies of the government might impact business any day. SWOT STRENGTH WEAKNESS Opportunity Threat
14. 1. 1. Paytm provides excellent and unbelievable offers. People are getting addicted to this app for recharging their mobile with different schemes. 2. It provides better schemes than other apps and are valid for wallet balance also. It is a quick stop for recharge. It is easy and reliable. 3. It also provides latest brands in Clothing like Nike, Adidas, Reebok, United Colors of Benetton, Arrow & many others. Provide latest techno-trends with brands like Apple, Samsung, HTC, Sony, Philips etc. Showcasing the choicest of products, we can explore endless products in other categories at Paytm. Shopping with Paytm is as easy as pie. Paytm has grown into something that offers a lot of functionalities in areas other than its chief purpose i.e., RECHARGES. This makes the app bulky and takes up lot of space. Processing takes time and finally fails to recharge. No replies on mails from customers. Huge traffic during festive seasons when new offers are introduced Online Shopping has seen an exponential growth in the recent years. Paytm has taken this as an opportunity and entered the world of online shopping with top brands across all verticals. You can literally buy anything in the wonderland of Paytm. Since Paytm is a mobile commerce, obviously it requires smart phone users.(Paytm Wallet) So smart phone penetrations, mobile internet access penetration are required. SWOT STRENGTH WEAKNESS Opportunity Threat
15. Reactive & Proactive strategy of Paytm & Snapdeal Reactive Strategy Proactive Strategy • Constantly reduce peer to peer cash transactions and implement O2O(Online to Offline and Offline to Online) Reactive Strategy • The art and science of customer acquisition and retention’ • Plan to collaborate with Entrepreneurs and startups who build companies and trends and not just their ideas. • Snapdeal's omni-channel strategy-is planning to bring footfalls to brick-and-mortar stores • Building a Customer Care Representatives Team to improve their reach through social Media and mend their reputation.(Risk Management Strategy) Proactive Strategy • Getting to understand the consumers. • Product oriented discounts and attractive offers Paytm Snapdeal
16. Customer Acquisition Paytm •Discounts(50% off, Sunday sell) •Loyalty Cash back(10% Cash back on bills more then 1000) •Reward Points •Referral offer •New Product Offer •Vouchers and Coupons •Seasonal sale •Update about Recharge Snapdeal •Discounts(Flat 30% off) •Discounts on Bill Payment •Referral Offer on Freecharge •Seasonal sales •Launch of New Product through site •Update about Recharge
17. ExistingMarketNewMarket Existing Product New Product Market Penetration Diversification Product Development Market Development Ansoff Matrix-Paytm Financial Service – ICICI life Insurance. Gold loan Repayment- Manappuram. Metro Card IRCTC-Ticket Reservation Hotels, Movies & Events, Flight Booking & Automobiles Payment Gateway Ex- Grofers, Domino's Payment Page Recharge Portal
18. ExistingMarketNewMarket Existing Product New Product Market Penetration Diversification Product Development Market Development Ansoff Matrix-Snapdeal Bill Payment Sector by acquiring Freecharge. Freecharge Petrol Pump, Gas & Electricity bill payments, Automobiles, Banking, Real estate & financial services Snapdeal is the shopping destination delivering to 6000+ cities and towns in India. E-Retail
19. Snapdeal- Freecharge Tie-up
20. Paytm Tie-up
21. Paytm Website
22. Snapdeal Website
23. Competitive Rivalry is very high Many online players like Amazon, Paytm, Jabong. Homeshop 18 etc Threat of new entrants is high (bargaining power of buyers is low) Threats of substitute products is low (bargaining power of supplier is low) PORTER’S FIVE FORCES -Less capital required -Less infrastructure required -Government initiative to increase FDI -No Direct interaction between buyers and suppliers. -No objection for coated price -People are shifting for online purchase then retail as it saves Time, Money, effort. - E Retail Offer more discounts -Many suppliers online. -Saves lot of money - Nether buyer nor suppliers wants to lose this channel.
24. Source : Google Trends Paytm is way ahead of its competitors
25. Conclusion • After studying and Analyzing the strategies of Paytm & Snapdeal, Paytm has great potential to grow and become first ecommerce website to achieve profit by its cashback model. • As far we have seen any product/service launch in Paytm comes with great offers(Huge amount of cashback). Example- Paytm offered movie tickets with 100%cashback on second ticket which gave a tough competition to giant company like BookMyShow. • Snapdeal however needs to expand & diversify itself in areas like making a payment gateway of its own • Paytm has reached a level where more expansion and diversification would be making its app bulky & huge traffic could result in failure of Recharge or Transactions. • Though with proper updates and efficiency Paytm can diversify itself in markets where Snapdeal has already tapped & thus giving direct competition by its cash back model strategy.
26. Mehul Kothari- 7203951648