Vijay Shekhar Sharma
Founder and CEO, Paytm
Vijay Shekhar Sharma, founder and CEO, Paytm, wears his logo on his front pocket. So far, the only other entrepreneur I've seen do that is Paperboat's Neeraj Kakkar, of whom Sharma happens to be very fond. "If Neeraj ever needs any help with his business, I'll give it to him without thinking twice..." he promises.
"Go big or go home" reads the writing on the wall of Paytm's head-office in Noida. And Sharma, 37, lives by that line. Launched in 2010, Paytm, short for 'Pay Through Mobile', has a customer base of over 100 million. What began as a recharge and bill payments platform is, today, a mobile wallet, an e-commerce destination and an aspiring payments bank.
While Paytm's recharge offering is still alive, it accounts for less than 22 per cent of the company's total transactions today. At present, Paytm's marketplace boasts a GMV (gross merchandise value) of a little less than $300 million a month; Vijay is confident the number will touch half a billion dollars by the end of this calendar year.
Paytm's marketing budget for 2016-17 is Rs 600 crore. Among Paytm's investors are names like SAIF Partners and Alibaba's Ant Financial.
First things first. I heard Paytm's ad campaigns are written by you. Is that true?
(smiles) Yes, it's true.
I write the print and online ads. For TV, I don't do the screenplay, but the copy's all mine.
I did not study in an English medium school but I now write advertising scripts in English, with nuances and all.... I am the copywriter of all Paytm ads.
That's great. You and your team must have met a whole bunch of creative and media agencies. Broadly speaking, have you been impressed or disappointed by the way they work?
The people we meet at the pitch level versus the ones who end up working on our account are never the same. Every agency has rock star creative artists whom you meet at pitches, but they don't create your ads. I say to my creative teams, "Show me what you have done, not what your agency has done."
Also, some work is done to win awards and is not necessarily created with the target customer in mind. Young brands like us need to bother about all these things.
Are you as involved in the media buying side? What's your approach to media like?
To me, spending money on a media platform is like giving money to that platform, but not necessarily getting the returns you expect. There's always a significant mismatch between the expectation and what actually gets delivered. We may spend money on a particular type of media, say OOH or TV, or on a particular TV channel, assuming our TG will look at it. But that's an assumption. If the TG is not watching, our money is gone.
So we're conservative about the way we choose our media properties. That's why, instead of spending money on say, a newly launched TV channel, we'd rather experiment with something like, let's say... aircraft branding. In fact, on Day One, Paytm was launched with in-aircraft branding, post which we did English radio branding. We experiment more than a traditional company would. These are tricky but critical branding decisions, because we want the brand to be visible to the correct person, the correct number of times.
But experimenting is the opposite of being conservative...
By conservative I mean on the pitch and type-of-media fronts. For instance, when it comes to our trade/supply side partners, we've noticed how national media brings about a lot more top of mind recall than vernacular/regional media does, but vernacular media has a lot more impact than national media does.
Spending money on national media is a necessary evil.
What would you say your biggest marketing challenge is, today?
We've reached 100 million customers. Now, reaching out to an incremental audience is the tough part. For them, online is not the primary medium. Language communication is the way to reach them.
For this, we have to go long tail, through local media, local languages and through media that is near them. National news won't work. Will local language news work? Will GEC work? We don't know yet. So the decision to buy media and create campaigns that reach out to the 'corners', to 'the last person', is an incredibly new, challenging thing. Few days back we thought we could reach them through the mobile... while that's a fact, we're now putting an equal amount of effort in offline media and regional advertising.
That's interesting - You're saying your aim to induct half a billion Indians into the mainstream economy by 2020 is, to a great extent, a marketing problem...
To be honest, this is a tech and marketing problem, in equal measure. In fact, tech is led by marketing. Marketing plays an integral role here.
So does this mean you're as involved in 'Paytm the brand' as you are in 'Paytm the business'?
(laughs) My mornings, when serotonin levels are high, are for ambiguous topics like 'brand'. Later in the day, my time's for numbers.
The rule is - If it carries the logo and is going out to the public, I am involved. I give a lot of freedom to my advertising teams (McCann), but I review every ad for sure. I build the basic templates and decide which brand elements are to be retained... that's a role I own. After that, my marketing team takes over. In fact, all our TV ads go through the 'modifications bargain' before they are released.
The Paytm logo you see today went through 54 iterations. When I was in San Francisco, I saw a beautiful yellow billboard with nothing but a ghost logo on it, but I just knew it was Snapchat. I wanted Paytm to have a similar element that people can instantly associate with us. I worked closely with my design lead to discuss the colours of our logo.
You have a reputation of being obsessed with your product. Are you also formally the product head?
Yes, logically, I am product head here.
You have algorithms in place to give you details about your existing user base. How has the pool evolved over the years? How has this data helped you take marketing related decisions?
Our primary demographic is the young under-30 person, but of late, surprisingly, families have started getting interested. Parents and older people are asking about Paytm. They use it mostly for utility (example, electricity bill) payments. So from 20-30 year olds we're heading to 40-50 year olds; that's a new demographic for us. That's why, though our previous ads only showed young people, the newer ones have older characters like buaji, moms, dads... we're trying to tell older people, "Paytm is for you too."
We launched our offline payments (QR Code scan option) in November last year. By February, when we saw the numbers and realised how well it was working, we decided to spend more ad money on it. We were all set to launch our marketplace campaign at the time; the script and casting were done. We were going to start shooting. But we decided to shelve the marketplace campaign and double our momentum on the offline payments campaign instead.
And since we released the QR Code ad campaign four months back, we've seen a 600 per cent hike in usage of offline payments. So far, the ad was aired on TV only on weekends (Friday, Saturday and Sunday). We now want to double the air time and increase the frequency of the TVC. The media buying trick is - getting consistent, long term media presence, instead of doing short term, 'impulse media' or 'burst' campaigns.
Research indicates a gender skew when it comes to the adoption of mobile wallets - it's more popular among men. What does your consumer data show?
There is a skew towards men but it's not that big. I would say it's at around 55:45. In fact, our ads show many payments being made by women...
... In a move to reflect reality or get more women to use Paytm?
Our approach to advertising is to amplify what we see, not to swing behaviour.
In fact, the concept of cashback, and shopping with cashback money, is such a... erm...
... Female insight?
Exactly! Unlike a discount, where you feel like you've got a good deal and are then disconnected from the system, cashback makes you feel like you are gaining something; it makes you come back to the system. Men just want a good deal; then they forget about it.
By the way, 85 per cent of transactions on Paytm do not have any cashback. While Cashback is a great incentive to drive stickiness, it must not be the only one.
You also run an e-commerce business. Does Paytm stand for mobile payment or e-commerce? Why is it strategically necessary to have both plays?
We stand for payments. But an independent payments business is an orphan business, without a marketplace to anchor it. It's like the symbiotic relationship between a rocket (payments) and a launcher (marketplace). Our marketplace allows us to build relationships with merchants and extend our payment relationships to financial services.
We went to all the existing marketplaces to deploy our wallet. Seeing their disinterest, we decided we had to take a call to build our marketplace ourselves.
When we launched our marketplace, I had said, "Anybody who's serious about the commerce business will have to start by building their payments business..." At the time, nobody understood; today, everyone is trying to tow that line. When we were not a marketplace yet, none of the e-commerce companies was serious about being in the payments space.
What's more challenging - getting merchants or users?
The sequence is - first consumer, then merchant. If you have consumers, merchants will come. It's never the other way around. So we continue to drive user acquisition.
Our association with BCCI (title sponsorship) last year helped us reach regional customers in every nook and corner of India. After that, the merchant ecosystem accepted us.
Merchant acquisition is done via local advertising, in their cities. The offline business in this country is so big that even if a merchant ignores online, not much is missed.
One of your investors Alibaba also has stake in Snapdeal, a rival brand. You can see why this has led to discussions about a conflict of interest...
I bother about my own house, not somebody else's. We're not intrusive. We don't know how one gets an advantage by doing what they have done. We're just clear that if we are getting what we need from them, they can do whatever they want. And we're getting one hell of a deal.
(smiles) In any case, technology investments are very incestuous, globally.
At this juncture, with so many milestones behind and ahead of you, what, besides potential systemic failure, worries you?
It worries me that we're spread out too thin. Before being good at one thing, we launch another.
(This interview was first published in our magazine afaqs! Reporter on August 1, 2016)
A Note From the Editor
"What am I going to ask him?" I asked my boss nervously, when we decided to interview the founder and CEO of Paytm and put him on the cover of this issue. Not that there's any dearth of questions to throw at a successful entrepreneur who runs a hot, young brand like Paytm, and has a rags-to-riches story to tell.
The hassle was - there's already so much literature around this spunky 37-year-old on the internet; asking him to go over his early day struggles and the lessons therein, all over again, was not the best idea. And he's not the kind of interviewee who dodges tough questions. So any 'big reveal' we could've hoped for, was already done.
(There's a flipside to having so much pre-interview material at one's disposal, though: By the time I met him in the flesh, I felt like I already knew Vijay well. Heck, there's a YouTube video of him doing bhangra - during an interview!)
So anyway, back to the problem. After thinking long and hard about how I could swing a fresh, readable piece with an over-interviewed businessman who has no qualms breaking into a jig on cue, the solution appeared - Stay true to the DNA of this publication and ask him about media and advertising. "Let's do this the afaqs! Reporter way," we decided.
We asked Vijay about his involvement in the advertising process and guess what - turns out, he's as obsessed with Paytm the brand as he is with Paytm the business. He is finicky about things like the copy - (Psst, he claims he writes it himself. Must ask Prasoon Joshi, boss man of Paytm's agency McCann, whether that's true) - and the logo.
The moment of truth for Vijay is when a person, mobile in hand, has to choose between the cash-on-delivery, plastic money and mobile wallet options. "Everything that leads up to this moment," he insists, "is marketing."