Indian Retail giant Flipkart is planning to enter the E-Wallet market. It plans to invest 100 Million USD (670 Crore INR) over the next three years in this venture. Flipkart acquired payment startup ‘PhonePe’ this April. ‘PhonePe’ will hold the baton as it will try to carve out a piece for itself in 24, 124 Crore pie.
Flipkart entering the E-Wallet Business Quite Late
“This is a long-term strategic bet for us, and we believe PhonePe could become as big as Flipkart one day,” Flipkart’s CEO Binny Bansal said recently. He also said that entering Payments business is one the top most important priorities for Flipkart at this moment along with commerce and logistics.
According to Sameer Nigam, the founder of PhonePe and the head of payments business at Flipkart, the wallet will be a semi-closed portal with a tie-up to a multinational bank.
This decision comes at a part of infusing new life into their retail business which is taking serious hits from close competitors like Amazon and Snapdeal. Interestingly, both Amazon and Snapdeal have already made strides into the payments business. While Amazon has acquired Emvantage, Snapdeal brought under its hegemony an already established E-wallet ‘Freecharge’ last year. Whilst Paytm and Mobikwik already have a combined number of consumers over 200 Million.
The E-wallet which at first will only be used to make payments on the websites owned by the company, is expected to be extended to include many other operations in the future.
Flipkart will be relying on its customer base which is over 74 Million to kick-start its E-Wallet operations. “Their consumer acquisition strategy will be from Flipkart application and its customers. UPI has potential to kill the wallet business and the need to create a brand presence suddenly goes out of the window,” said Amrish Rau, managing director at payments firm Citrus.
Already established E-Wallets like Paytm, Mobikwik and Freecharge are sure to give a tough competition to the Flipkart in the payment business. It would be very interesting to see the strategies they would adopt to claw its way to top names in the business. Considerable monetary resources and effective marketing team will be the main weapons the company will have to rely on to get ahead of the competition.