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One97 Communications: creating ripples in the m-commerce market

May 05, 2014
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Mobile commerce (m-commerce) has gained traction in the country, driven by falling handset prices and increasing uptake of mobile internet connectivity. According to industry estimates, in 2013, the contribution of e-commerce site traffic to the online shopping category via the mobile device increased from 8 per cent to 20 per cent and on tablets from 2 per cent to 6 per cent. Looking to capitalise on this opportunity, Noida-based One97 Communications Limited (OCL) is focusing on expanding its product portfolio in both the international and domestic markets.

Background

Founded in 2000, the company’s areas of operations include delivering mobile content, advertising and commerce services to mobile customers. OCL also offers digital goods and services under the Paytm brand, as well as mobile advertising, marketing and payment services for merchants.

Its telecom client base in India includes Bharti Airtel, Vodafone India, Aircel, Reliance Mobile, Idea Cellular, Videocon Telecom, Uninor, TATA DOCOMO and Bharat Sanchar Nigam Limited. Its global clientele includes Etisalat, Afghan Wireless and Citycell.

 

The company has a large footprint, both in India and in overseas markets. In India, its presence spans New Delhi, Mumbai, Pune, Chennai, Bengaluru and Kolkata, while its overseas presence includes Africa, Europe, the Middle East and Southeast Asia. Its investors include SAIF Partners, Intel Capital, SAP Ventures and Silicon Valley Bank.

Company performance

According to Kiran Vasireddy, senior vice- president and business head, OCL, has been busy on several fronts. “While the company achieved several milestones over the past year, a notable development was enhancing our product portfolio by foraying into new segments. We already held a leading position in the recharge space and took steps to tap the lucrative mobile commerce segment as well.”

To this end, OCL recently launched the Paytm Shopping application which has the “bargain” feature, enabling customers to bargain for an item before purchasing it.

Moreover, after being granted a licence by the Reserve Bank of India, the company launched a semi-closed wallet facility, the Paytm Cash Wallet. This is a prepaid payment option through which customers can add cash from their bank or credit card for mobile-based transactions.

“The idea behind launching a mobile wallet was to make mobile-based transactions simpler. We aim to capture impulse purchases,” explains Vasireddy.

Meanwhile, on the telecom side of the business, the company strengthened its presence in both the domestic and overseas markets. To consolidate its position, OCL acquired the cross-messaging platform Plustxt, which is run by Bengaluru-based Plustxt Mobile Solutions Private Limited, through a cash and equity deal valued at about $2 million. Explaining the rationale behind this acquisition, Vasireddy says, “The basic idea behind launching the mobile marketplace was ensuring customer connectivity with the merchant. We understood that providing an over-the-counter experience to our customers was important, in order to enhance the overall experience. Plustxt was a viable option for this and we acquired the technology and integrated it into our system.”

The company’s efforts to carve a niche for itself seem to have paid off. According to company officials, OCL posted revenues of Rs 2.27 billion in the fiscal year ended March 31, 2013.

The outside view

According to industry analysts, by foraying into online retailing, the company will have to find its feet in a very crowded space, which has major players like Flipkart.com, Amazon and eBay.

However, Vasireddy says that if the positive response to the Paytm application is any indicator, the company is geared to tackle competition. “Paytm is the preferred application for online recharges. With the number of mobile-based transactions steadily increasing, we have launched the marketplace application, which has generated a significant response. Considering the number of orders we have been receiving, we are bullish about doing well in the m-commerce space.”

The road ahead

Going forward, the company has chalked out a multi-pronged strategy. “We aim to support a million transactions a day by 2015 on the Paytm platform. Currently, we support over 300,000 orders, of which over 50 per cent are mobile based. Given the rapid uptake of mobile-based transactions, we are confident that we will meet this target,” says Vasireddy.

Another key focus area for the company is adding more product categories to the marketplace application. On the telecom business side, OCL plans to expand its footprint to Europe and Latin America. Also, the company is reportedly looking to invest Rs 1.5 billion through internal accruals for Paytm. This investment is expected to provide a fillip to its operations until end-2014.

Net, net, OCL has recognised the potential of m-commerce in India and has pulled out all the stops to leverage this opportunity.

 
 
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