Paytm has announced that it will be splitting its original business wallet into a separate app. The current Paytm app will soon lose its wallet functionality and become a standalone shopping app, competing with the likes of Flipkart, Amazon and Snapdeal. This move reinforces Paytm’s ambitions to become a large part of India’s ecommerce space.
Paytm, which started off as a recharge business and is now the premier digital wallet provider in the country with over 100 million users, is looking at entering other sectors in the digital arena. The company has expanded its e-commerce arm, which currently accounts for 40% of its revenues, and is also eyeing in the areas of bus bookings, hotel bookings and financial services.
However, changing the focus of its app to shopping reinforces the direction in which the company wants to grow. Paytm hopes that 60% of its revenues will be contributed by e-c0mmerce next year. The move also allows Paytm to have a lighter app. Competitors like Snapdeal have a separate wallet app in Freecharge. “We don’t want to clutter our app with lots of offerings”, says Kunal Shah, CEO of Freecharge justifying why Freecharge and Snapdeal remained separate apps after its acquisition.
Alibaba, which recently put $680 million into Paytm, follows a similar model in China, where its Alipay app takes care of payments, while the Tmall app does the commerce business.