Asia Press Agency

Tag: digital commerce

  • Paytm Aims to Onboard 10 Million Merchants on ONDC by 2025

    Paytm Aims to Onboard 10 Million Merchants on ONDC by 2025

    Vijay Shekhar Sharma, the CEO and founder of One97 Communications, the parent company of Paytm, announced on Monday that the company is contemplating onboarding 10 million merchants by 2025 onto the government-backed Open Network for Digital Commerce (ONDC) platform. He stated that approximately 11.8 million customers have already been directed to Paytm’s product through the ONDC platform.

     

    Paytm’s ecosystem revolves around small merchants, and its mission is centered on assisting these businesses in becoming integral parts of the mainstream economy. Vijay Shekhar Sharma shared this vision at an ONDC event, emphasizing the role of ONDC in expanding Paytm’s reach and connecting with new customers.

     

    ONDC is a government-supported platform open to all e-commerce stakeholders for service onboarding. Digital payment firms such as Paytm, PhonePe’s Pincode, and hyperlocal e-commerce company magicpin are among the entities present on this platform.

     

    Vijay Shekhar Sharma highlighted that ONDC already boasts more than 10 million customers, constituting one-fifth of the total e-commerce market in India. The platform provides an avenue for merchants to connect with a vast customer base actively seeking new products and services.

     

    Sharma acknowledged the challenges of trust and discovery that come with bringing a large number of merchants onboard but expressed optimism, stating that there is a significant pool of customers ready to embrace online shopping.

     

    The CEO’s commitment to bringing 10 million merchants onto ONDC by the end of 2025 reflects Paytm’s dedication to leveraging digital commerce platforms for the benefit of small businesses. The move aligns with the broader mission to foster financial inclusion and enhance the accessibility of digital services.

     

    T Koshy, the Managing Director and CEO of ONDC, provided insights into the platform’s recent operations. He noted that since January, ONDC has witnessed significant growth, with nearly 5 million transactions this month, compared to approximately 1,200 transactions at the beginning of the year. Transactions are now occurring in 600 cities, indicating widespread adoption.

     

    Koshy expressed optimism about the future, envisioning substantial growth in transactions in the next 1-2 years. The goal is to add another zero to the current transaction levels within a year, signifying the platform’s potential to catalyze a significant shift in e-commerce dynamics.

     

    The commitment and growth seen in Paytm’s engagement with ONDC underscore the transformative impact that government-backed digital commerce initiatives can have on connecting businesses with consumers and fostering economic growth.

  • KKR Invests ₹2,069.50 Crore in Reliance Retail

    KKR Invests ₹2,069.50 Crore in Reliance Retail

    KKR, a global investment firm, has announced an investment of ₹2,069.50 crore into Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Limited. This investment values RRVL at a pre-money equity value of ₹8.361 lakh crore, making it one of the top four companies in India by equity value.

     

    KKR’s follow-on investment will result in an additional equity stake of 0.25% in RRVL on a fully-diluted basis. When combined with its previous investment of ₹5,550 crore in RRVL in 2020, KKR’s total equity stake in RRVL will reach 1.42% on a fully-diluted basis. RRVL had previously raised ₹47,265 crore from various global investors in 2020 at a pre-money equity value of ₹4.21 lakh crore.

     

    Reliance Retail Ventures Limited, along with its subsidiaries and associates, operates India’s largest, fastest-growing, and most profitable retail business. It serves 267 million loyalty customers through an integrated omni-channel network of over 18,500 stores and digital commerce platforms. RRVL’s business spans across various categories, including grocery, consumer electronics, fashion & lifestyle, and pharmaceuticals.

     

    RRVL’s vision is to revitalize the Indian retail sector through an inclusive strategy. It aims to serve millions of customers, empower micro, small, and medium enterprises (MSMEs), and collaborate with global and domestic companies as a preferred partner. The goal is to deliver significant benefits to Indian society while generating employment opportunities for millions of Indians. RRVL’s New Commerce business has digitized over 3 million small and unorganized merchants, enabling them to leverage technology tools and efficient supply chain infrastructure.

     

    Isha Mukesh Ambani, Director of Reliance Retail Ventures Limited, expressed appreciation for KKR’s continued support and strong belief in RRVL’s vision and capabilities. She highlighted the importance of the partnership with KKR in driving the transformation of the Indian retail sector.

     

    Joe Bae, Co-CEO of KKR, praised RRVL’s vision, digitalization efforts, resilience, and performance, especially in challenging times like the pandemic. He emphasized KKR’s commitment to supporting RRVL’s mission to build a more inclusive Indian retail economy.

     

    Gaurav Trehan, Head of Asia Pacific Private Equity and Head of India at KKR, acknowledged Reliance Retail as a corporate leader and innovator in India, with the potential to transform the country’s retail industry through digitalization.

     

    KKR’s investment primarily comes from its Asian Fund IV. The transaction is subject to regulatory and customary approvals.

     

    Morgan Stanley acted as the financial advisor to Reliance Retail Ventures Limited, while Cyril Amarchand Mangaldas and Davis Polk & Wardwell provided legal counsel for the transaction.

  • Bima Sugam: The Emerging Challenger to PolicyBazaar

    Bima Sugam: The Emerging Challenger to PolicyBazaar

    In a surprising turn of events, the insurance aggregator giant PolicyBazaar is facing an unforeseen challenge from India’s insurance regulatory authority, the Insurance Regulatory and Development Authority of India (Irdai), with the upcoming launch of Bima Sugam. This new platform, set to debut in the coming months, is expected to bring about significant changes in the insurance market dynamics. This move has raised concerns that PolicyBazaar’s market share, revenue, profitability, and stock price could be severely affected over the next couple of years.

     

    PolicyBazaar, founded by Yashish Dahiya and Alok Bansal, currently commands a substantial portion of the insurance aggregator market. However, the introduction of Bima Sugam, meaning “Insurance Easy,” poses a formidable challenge. One of India’s largest life insurers has indicated that Bima Sugam might offer insurance products at premiums that are 10-15% cheaper, potentially attracting a significant portion of customers seeking cost-effective coverage.

     

    The potential impact of Bima Sugam on PolicyBazaar’s business model is a cause for concern. Experts believe that Bima Sugam’s entry could disrupt PolicyBazaar’s market share, causing a decline in revenue and profitability. This could have a cascading effect on the company’s stock price, making its existing business model unsustainable. The challenge is further heightened as Bima Sugam’s platform gains regulatory backing and support from multiple insurance companies.

     

    PolicyBazaar has acknowledged the potential risk posed by Bima Sugam and is reportedly strategizing a contingency plan to counter the impending challenges. This includes preventing potential value erosion and seeking ways to maintain its competitive edge in the insurance aggregator landscape.

     

    The anticipated impact of Bima Sugam on PolicyBazaar has also been reflected in the stock market. An analyst report by Macquarie Group has projected a target price of ₹560 for PB Fintech shares, which is 25% lower than their current levels. This projection stems from the belief that Bima Sugam’s disruptive platform could affect PolicyBazaar’s “take rates” and market share.

     

    In a bid to increase insurance penetration and capitalize on changing consumer behavior, Irdai is tapping into the digitization of buying habits. Bima Sugam is positioned to become a dedicated distribution channel for insurance products, offering simplified insurance policies at more competitive premiums compared to both PolicyBazaar and traditional insurance agents. While Bima Sugam initially plans to offer basic insurance policies, the platform aims to expand its offerings to include more complex life and general insurance products in the future.

     

    The emergence of Bima Sugam as a significant competitor to PolicyBazaar signals a shift in the Indian insurance landscape. As both platforms vie for customer attention and market share, the insurance aggregator sector is poised for a transformative phase, with potential benefits for consumers seeking more affordable insurance options.