Sankalp Dikshit

"Cricket is now almost a medium for us"

We interviewed Shankar Nath, senior vice president and Jaskaran Singh Kapany, vice president, marketing, Paytm.

As one reaches Paytm's head office in Noida, it's difficult not to wonder why this tech-led company has not headquartered in the cities known to be fashionably official like Gurugram or the techie-favourite, Bangalore. "Emotional reasons" is what we were informed. The company which was launched in August 2010 at this very Noida office has not only grown in terms of the number of floors but, if the company's spokesperson is to be believed, then Paytm is now reporting a billion transactions per quarter with a $20 billion Gross Merchandise Volume (GMV). Reports also suggest that One97 Communications, which is the parent company of brand Paytm, has garnered revenue of Rs 814 crore in 2016-17.

Paytm, which is fast expanding to different market segments, flagged off its journey with prepaid mobile and direct-to-home recharges. In 2014, the company launched its own 'wallet' and by 2016 users could book tickets for movies, events, flights, railways, among other things on one single app. Leveraging the nationwide demonetisation-frenzy, the brand introduced its 'QR-code' in the market, through which Paytm was able to bring a large chunk of the population to the world of online transactions. Last year, the brand added two new verticals to its business namely - Paytm Mall - which is an e-commerce shopping platform and 'Paytm Payments Bank' which permits a deposit up to Rs 1 lakh.

"Cricket is now almost a medium for us"

Shankar Nath and Jaskaran Singh Kapany (right) at Paytm's head office in Noida

The mobile-first financial services company which operates in India and Canada has been buzzing and making its presence felt for various reasons. Sample this: the brand began trending when founder Vijay Shekhar Sharma lashed out at upcoming rival WhatsApp in the payments market for engaging in alleged unfair trade practices. This was peppered with Paytm's winning streak at creative awards, most notably at the recently concluded Adfest (in Thailand) along with the Effie awards, which recognises effective marketing strategies. Lacing it all up was the news of the company's mall business receiving a fat investment of $445 million from Alibaba and Softbank. Paytm boasts over 300 million registered users at the moment.

"Cricket is now almost a medium for us"

Shankar Nath

"Cricket is now almost a medium for us"

Jaskaran Singh Kapany

As Paytm gears to foray into the mutual funds category, we caught up with Shankar Nath, senior vice president, Paytm and Jaskaran Singh Kapany, vice president, marketing, Paytm. Nath who is a graduate of St. Stephen's College, New Delhi and Indian Institute of Management, Ahmedabad, joined Paytm in 2013. Previously, he was working with ICICI Lombard in the role of head, marketing and direct. Nath has to his credit an online insurance aggregator which he founded in 2010. In a career spanning 22 years, Nath has been associated with companies like Aviva Life Insurance, CitiFinancial and GSK.

Kapany, on the other hand, has five-years of agency-experience at JWT where he worked as a senior account director after completing his graduation from Xavier's Institute of Communications, Mumbai in 2003. Prior to Paytm, Kapany also worked at ICICI but in a different vertical - Prudential Life Insurance - for a period of over six years.

In an interview with the company's marketing bosses we tried to get a sense of what marketing means in a tech-led company like Paytm where consumer loyalty swings with cash-back schemes and where instead of ad campaigns, the app's user interface decides recall value.

Edited Excerpts

When we interviewed Vijay Shekhar Sharma two years ago, he said that the moment of truth is when a person, mobile in hand, has to choose between the cash-on-delivery, plastic money or mobile wallet options. "Everything that leads up to this moment," he insisted, "is marketing." Do you agree with this? What do you come to work thinking your role is, particularly in a tech-led company like PayTM?

Shankar: There is a lot of wisdom in what Vijay said. Ultimately, the app has to be relevant to the user. And when we say relevant there are two things here. First, if I am using the app for just one particular use case, chances are I'll uninstall the app after the one-time use. But if I have six-seven use cases, then I will retain the app. Only when you become part of the user's daily life is when you stay relevant.

However, this is the last stage. The stage even before this involves creating awareness in order to be in the consideration set of a potential user. We have been doing a lot of work around that in terms of online, offline and digital marketing for our earliest category 'recharge' which also happens to be our most common use case.

All these put together essentially get the user to us in the first place; it's then the job of the app to keep the user. In this app ecosystem, we are not fighting the battle with only one player in a single category but a different set of companies in each category.

Jaskaran: I think the pinnacle, any brand marketer would look to strive for, is to connect with the users at a personal level and create an emotional salience behind what you are doing. And in the last three-four years, we have done it decently well.

While the user gets to swipe from one use case to the other, how do you divide your time and effort across the wallet, payments bank and e-commerce platform? How do you prioritise?

Shankar: While these are different businesses, one feeds off the other. For us, the Paytm mother-brand becomes most important; a host of initiatives and investments essentially go towards making the mother brand stronger.

Jaskaran: Results are real time so if we observe that something within a category is working in terms of app downloads; we put a slightly disproportional amount of marketing spends in that category and see where it takes us. You get to know within 48 hours if the educated punt that you have taken is working or not.

Shankar: That's a metric which is used very often since it makes things clearer. The amount of money is finite and you need to decide what gives you the best returns. Also, the other metric we look at is the average lifetime value. The lifetime value has a direct correlation on what or how much I can spend when it comes to advertising.

Jaskaran: Seasonality plays a part as well. For e-commerce, summer is the season to build the category of large appliances - ACs in particular. We try to ride that wave through our marketing efforts in order to boost our mall business. But then maybe the recharge or bill payments will take a back seat from a marketing point of view. Overall, it's a very complex interplay of various categories demanding their fair share of attention, seasonality and also what is happening in real-time on the app ecosystem.

There is no wrong or right way to acquire a customer. At the end of the day, the doors may be many, but all of them lead you to the same house. Once the individual has entered the house, there are many things that you can serve and they can take their pick.

For a tech-led brand like Paytm, how important is mass media messaging?

Shankar: At one level Paytm is a digital brand - it's on an app and all the transactions are happening digitally. However, we realised early on that to have some degree of credibility or stature in India, one cannot escape mass media. At the same time, it's difficult for an online brand to make the transition from digital to mainstream advertising. Mostly because it is counterintuitive. You think: 'all my customers are online, so why should I invest in TV?' In our marketing journey, we made this transition quite early. It is very expensive, but that's the way it is and it has helped us a lot!

Paytm has been a consistent performer at creative awards. What do these awards mean to you? Agencies often say clients don't care about awards - is that true?

Jaskaran: The input criterion is not to put in the effort, hard work and strategy to get an award - awards are a by-product.

To what extent are you personally involved with the brand's creative product on the advertising front? Do you brainstorm with the folks at McCann regularly; do you necessarily finetune the creative brief and have the last word?

Jaskaran: Do we issue typical creative briefs? No! It is more of a healthy brainstorming discussion over tea. All strategies look sexy on paper, but the final manifestation of it is in a creative product which requires our involvement through constructive discussion with the agency.

Shankar: Many times, the McCann team is not waiting for a brief. They observe what is happening in the market and tell us what should be done. Also, we have realised that the McCann team has more or less remained the same which adds a lot of value. The ultimate delight for a marketer is when your brand name becomes a verb. And today, 'Paytm karo' is that. It's something which McCann came up with.

Jaskaran, to what extent does your past agency experience help in this regard?

Jaskaran: At JWT, I spent five years doing planning, account management and a bit of creative as well. I personally feel that you can speak to the agency folks in a language that they understand because you've been there. If you speak to the stakeholders in the way they would look to interpret a strategic brief, you tend to get it right the first time, more often than not. This helps the creative team come up with quicker and compelling pieces of communication which can go to market faster and impress upon consumers quickly.

Speaking about WhatsApp's entry in the payment space Paytm is quite visibly displeased. So, how is Paytm strengthening its marketing operations in order to remain the market leader despite WhatsApp's entry? After all, one cannot undermine competition since, unlike current rivals like Hike or PhonePe, WhatsApp comes with an existing user base of over 200 million...

Shankar: We are doubling down on all our investments in making Paytm a much-loved brand. There are many initiatives that are underway on the marketing front which reinforce what we have done earlier. One of them is our important association with cricket - we are the title sponsor for the BCCI Indian cricket and Paytm has now signed up with IPL for the next five years.

When you advertise on other genres there is a chance that the user has moved away from your advertising when it played because he/ she is either watching deferred content or he/ she is seeing it the next day on the app. Sports, perhaps, is the only category which enjoys real-time viewing; though it's very expensive. Nevertheless, it gives us a very good return.

KYC has become a pain/ grumble point for a large portion of your user base. What role can advertising play to convey or educate these confused/ angry users so that they don't leave you eventually?

Shankar: Everyone else is advertising about KYC, so we don't need to! Category creation of sorts has already been done. We just have to make it easy for the person transacting on Paytm to complete the KYC process.

A major thing which has helped us here is that when the app becomes an integral part of a user's life, owing to the different use cases, the probability of you taking two minutes off to get your KYC done is much higher. However, that won't be a case if the app was being used for a limited number of things. We were inundated with KYC requests on the first two days, but now it is business as usual.

In a product segment driven by discounts and cash-backs, is there even scope to nurture consumer loyalty? Also, what then is the role of marketing?

Jaskaran: Marketing and advertising can help address 50-60 per cent of it, but you need a compelling product proposition. There is no one real app, other than Paytm, that can do as many things as we do. Loyalty stems from there.

Shankar: Cash-backs will only help at the customer acquisition stage. This is why we are fanatical about the user interface. The golden rule we follow is to have a fewer number of taps or clicks on the mobile screen before a user completes the transaction. One additional tap or click means a 10 per cent drop off. It's as bad as that.

In what way has your user profile changed over the past 12 months?

Shankar: The user base has become broader. Two years ago we were majorly concentrated in the top seven-eight metros, now there is a long tail. There has been a data revolution in this country and we are seeing that in our transactions.

Another important observation is that one cannot expand by relying on English alone. Vernacular has started to play a big role, both in the app as well as in our communication. Between Jaskaran and me, that's our next big challenge. Now, you cannot simply work with varied translations of work originally written in the English language. You need a local flavour.

Jaskaran: Also, not only has the demand increased from Tier II/ III cities but the average ticket size has also significantly gone up every month.

Shankar: We add about 10 million consumers every month. And our next 200 million users will not only come from Tier II/ III but also from Tier I cities.

Give us a sense of how Paytm's media pie looks like, particularly from the fund allocation point of view...

Jaskaran: At a macro level, 34-40 per cent of our spends would be reserved for TV and print each. Print has gained significantly over the last year-and-a-half. Then would be digital, followed by OOH, majorly for the non-metro cities.

Shankar: Our association with cricket is a Rs 50 crore property per year which gets amplified through TV though that's not a cost I can put on TV; it's an on-ground association. Interestingly, cricket is now almost a medium for us and we look at it independent of the media vehicle.

Small street vendors use Paytm to get payments from their patrons and the amounts are small. Do you have any kind of outreach programme to connect with this pool of users? What do you make of this slice of your user base and how do you see this panning out in the days ahead?

Shankar: There are three legs to it; one is the user who needs to scan, the second is the shopkeeper who needs to understand the Paytm mechanism and then is the distribution reach which is crucial. Marketing can only be as good till the time there is a strong on-ground distribution. You may have as much consumer pull created by marketing, but if the distribution is not strong enough, then the product is not in the market and you are finished. When you move to smaller cities, distribution becomes even more critical.

Jaskaran: Since people have a deep affinity for their mother tongue, print works fantastically well because you can geographically isolate a state or a city. Radio works well too. Apart from this, we do tactical activation-led campaigns, say, for 15 days where we pick a popular local market and educate the customer.

Paytm has partnered with several brands across segments and categories for co-promotion campaigns; how is the brand benefiting from such collaborations?

Shankar: You cannot be present on TV through the course of the year. Hence, over the last two-three years, we have had at least 100-150 co-promotions with consumer brands which have amplified our brand. Every brand, in a year, runs a consumer promotion scheme. For instance: buy Surf Excel and get a bucket free! So, we associated with these brands and convinced them to give away Paytm cash as gratification instead of the bucket.

The partner brands agreed since Paytm cash is relevant to 90 per cent of the partner brands' audience against a bucket which may be relevant to say 30 per cent of the population. In terms of finances, if the partner brand was earlier spending 50 per cent of the campaign's budget on advertising and the rest on gratification, we then take up 25 per cent of gratification cost and request the partner to put 25 per cent of the saved gratification money on advertising. This way advertising gets 75 per cent share of the campaign's budget. So, when the offer gets advertised, Paytm also gets advertised. People often confuse our advertising budget to be very high, but that's not the case; we are simply more visible.

Could you share the actual marketing and advertising budget?

Shankar: I would say about two per cent of our GMV at the most.

If there was one thing you could change about Indian advertising what would it be and why?

Jaskaran: Ad agencies need to get out of their shells and not work as domain specialists. Marketers have to deal with the much-abused word 'Millennial', who do not give two hoots about who you really are. Marketers are looking at a single shop or point-of-contact that can address strategic, creative and media needs. The horizontality of agencies needs to compress and they need to work as a cohesive unit.

Shankar: A thing which worries me is that advertising is losing relevance in attracting talent at a young age. Primarily because advertising, at the entry level, is not a good paymaster. Twenty-five years ago advertising jobs would pay as much as any marketing job would, but that's not the case today. I think it's the function of the fact that advertising margins in India continue to be squeezed down which is having an impact on how much you spend to get good talent.

Earlier, advertising commissions used to be anywhere close to 15 per cent, which I think was too high, but today, the industry has moved away from that model making the margins very thin. After all, advertising is not a time and material study. The stakes are high and as a brand, if I am spending Rs 30 crore on a campaign, saving Rs 5 lakh on an advertising agency doesn't matter to me. At the end of the day, the output of any campaign will only be as good as the input.

A Note From the Editor

Two years back, when I interviewed Vijay Shekhar Sharma, founder of Paytm, he said something that really stayed with me - for him, the proverbial moment of truth is when a person, mobile in hand, poised to make an online transaction, has to choose between the cash on delivery, plastic money and mobile wallet options. Everything that leads up to this moment, is, in Vijay's book, "marketing". Well put, isn't it?

So this time around, we decided to interview Vijay's top two marketing men Shankar Nath and Jaskaran Singh Kapany. The idea was to understand what going to market with a mobile-led tech product like Paytm really means. What keeps them excited, alert and challenged? What are their biggest worries and apprehensions? Which of the brand's key verticals - mobile wallet, e-commerce, payments bank - do they spend most of their time on? What's it like working for someone who recently made it to Forbes' list of billionaires? Okay, scratch that last bit. (But it's true!)

Personally, one of my favourite things about Paytm is the way the brand has managed to penetrate the lower socio-economic segments of the population - the way small-scale, local vendors have taken to the product in a big way. I can't help but smile each time I notice the trademark blue and white 'Paytm Accepted Here' poster (Vijay fussed over the colour scheme for months before okaying this combination, by the way) hanging or stuck on the cart or 'thela' of a roadside pani puri wala, nariyal pani wala or some such street food vendor. We asked Shankar and Jaskaran what they're doing to connect with this set of loyalists.

We had a good time putting this interview together this issue. Sit back, relax and enjoy the words of the marketing bosses of this piping hot brand that began as an online payments platform and is now poised to become a wealth management platform.


This interview was first published in our magazine afaqs!Reporter on April 16, 2018.

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