Previously, we did a thorough business model of PayPal. Today we are going to see the thorough SWOT analysis of Paytm.
Paytm is India’s leading financial services company which provides consumers, businesses, and online companies a platform for financial services and digital payment. The business model of PayTM is a must-know for everyone! Paytm has over 350 million active users and is one of the top platforms for digital payment methods and captures a large audience across all economic strata in the nation.
Paytm has been making perfect use of digital marketing since it was founded in the year 2014. As the world was online and still shifting online, the marketing techniques are changing which is digital marketing. If you are interested in learning about the latest – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
Before we begin with the SWOT analysis of Paytm, here’s a deep dive into the company’s history, founding, products, financial status, and competitors.
India’s leading Payments App – PayTM is an Indian Multinational technology E-commerce company that specialises in digital payment and finances. It is a partial abbreviation of “pay through mobile” with online services like Paying bills, doing Recharges, Sending money to friends & family, Book movies & travel tickets as well.
It is one of the leading online payment methods, with its usage surging to new heights during COVID years. Vijay Shekhar Sharma, Founder and CEO of Paytm, has made banking accessible and convenient to people across the country. It was founded in August 2010 in Noida by Vijay Shekhar. In 2017 Paytm became India’s first payment app to exceed 100 million app downloads.
The payment methods supported by Paytm are Paytm wallet, postpaid, payments bank, debit cards, credit cards, net banking, UPI, and EMI. As per the statistics of the company, More than 20 Million merchants & businesses are powered by Paytm to Accept Payments digitally directly into their bank accounts and Paytm wallets. Paytm also uses various advertisements and paid promotional content to generate revenue.
|Founder||Vijay Shekhar Sharma|
|No. of Employees||10,000+|
|Market Cap||Rs 40,863 Crore (2022)|
|Annual Revenue||Rs 3,187.60 Crore (2021)|
|Net Income/ Profit||Rs 1,696.10 Crore (2021)|
Products & Services by Paytm
Paytm is an online money transfer service. It offers a variety of products & services, including
- Paytm Mall
- Paytm Payments Bank
- Paytm Money
- Paytm Smart Retail
- Payment system
- Mobile payments
- Online shopping
Competitors of Paytm
- State Bank of India
After understanding the core of the company, let us now proceed to the SWOT analysis of Paytm.
SWOT Analysis of Paytm
A SWOT analysis determines the strengths, weaknesses, opportunities, and threats that a firm faces. It’s a tried-and-true management model that lets Paytm compare its company and performance to that of competitors and the industry at large.
It’s an excellent tool for determining where the firm thrives, where it falters, generating remedies, and determining how the organisation may expand.
To better understand the SWOT analysis of Paytm, refer to the infographic below:
So let us first begin by enhancing the strengths of Paytm from the SWOT analysis of Paytm.
Strengths of Paytm
Strengths are an organisation’s unique qualities that give it an advantage in acquiring greater market share, attracting more customers, and boosting profitability. Paytm’s advantages are as follows:
- First in the Market: Paytm was first established in the Indian market which bought the revolution of online payments and wallets. The founder played a wise game and he innovated and introduced Paytm at the time when smartphone sales started booming in the market.
- Ease of Payments: Paytm brought life into ease with round the clock payment facilities or transfer of funds anytime, anywhere at 0% charge. This made it increasingly popular and accepted by both urban and rural populations fulfilling the daily needs of everyone.
- User & Merchant Base: Paytm merchant and user base is increasing at a rapid pace day on day with more than 20 Million merchants & businesses powered by Paytm to Accept Payments digitally followed by 300 million Indian users using Paytm to pay at merchant stores. The number is said to grow more in upcoming years.
- Big Investors: Paytm gets huge funding and financial support from some of the big companies and investors in the world like Tata, Ant Group, Alibaba Group, SoftBank etc. These businesses have a huge stake in Paytm and this helps Paytm to increase its market valuation and become India’s top.
- User-friendly Service Application: Paytm consists of almost everything from online reservation facility to online retail and recharge etc. The application of Paytm is also user-friendly and security shield protected where you can do transactions without any fuss and worry.
- Bucket of Offers: Paytm is always ahead to grab the attention of its customers using never-ending offers designed with the Indian market mindset and thus it works as a bonus to booming sales.
- Investment & Acquisition: Paytm is known for various acquisitions and big investments in 2013 Paytm acquired Plustxt, it also invested in logistics startups LogiNext and XpressBees etc. Such acquisitions and investments have made Paytm strong in the market.
- International Expansion: Paytm not only operates in India but also in Canada & Japan. Paytm launched its services in the Canadian market in 2017 and a joint venture with SoftBank & Yahoo Japan to offer services in the Japanese market from 2018.
- Sponsorship: Paytm acquired the title sponsorship rights for India’s domestic and international cricket matches including IPL, BCCI domestic matches in India etc. The rights include sponsor branding of the series with the title sponsor logo, designation as the title sponsor of the series, visibility at the stadium, and broadcast sponsorship rights to increase recognition of Paytm.
Weaknesses of Paytm
Weaknesses are aspects of a company or a brand that should be improved. The following are Paytm’s primary flaws:
- Customer Service: Several customer service concerns, including a lack of a helpline number and FIRC filing delays, are widespread. Call centre executives at Paytm are often rude and unable to handle many of the queries.
- Experiencing Fraudulent Activities: Electronic transactions are unquestionably straightforward, convenient, and appropriate. Even yet, it demands a certain amount of risk. As a result, you’ll need technical assistance as well as a secure mechanism to complete the transaction and transfer payments.
- Requires an Internet Connection: The entire transaction mechanism for sending and receiving money, as well as opening an account, is reliant on the internet and a fast connection. It can function in both advanced and developed environments. Paytm services, on the other hand, would be ineffective in growing economies and developing countries where internet availability is a major concern.
- TDR Rates That Are Higher: Their TDR rates for payment gateways are slightly higher than other companies.
- IT Infrastructure: As Paytm can work only on the internet, it most of the time makes things worse for the user when he/she is zero with cash and relies on Paytm payments at the time of merchant payments. The internet issues can occur in rural areas, remote locations and even tier 2 cities.
- Services Creating Confusion: Sometimes offering lots of services can also be confusing for users as most users are unaware of all the services that Paytm offers. The level of unawareness of technology and fear of online transactions is making things worse.
- Fear of Losing Money: Indians still have fear of doing online payments and transactions as most Indians are used to transacting in cash. But things are evolving so the people of India will. Secured digitalization will soon pick up online wallet services.
Opportunities for Paytm
Opportunities are areas in which a firm might focus to improve performance, improve services, and, ultimately, profit.
- Digital Cryptocurrency: Freelancers and online users are increasingly using digital crypto-currencies such as bitcoins. Many platforms are even willing to accept cryptocurrency. Many variables, such as digital literacy, internet connectivity, and the internet, have contributed to its growth. It also opens the door for Paytm to either launch or begins accepting this currency.
- From Cash Economy Towards Digital Economy: Developing economies, such as India, are aiming to go cashless or reduce their reliance on the currency. It presents a fantastic chance for Paytm to expand its services to capitalise on the potential.
Bonus Tip: As the world is moving towards digitalization it is opening enormous opportunities to establish a career in digital marketing. If you are also well-versed in several digital marketing areas then we can assure you that you will land your dream job soon. Each skill of digital marketing is taught by subject area experts and digital enthusiasts who were successful in moulding our students into skilled professionals of the future.
- Infrastructure: Paytm requires an infrastructure that can handle the goals as well as expected quick growth in demand following the launch. Infrastructure is also required to handle demand changes.
These variations could occur as a result of increased payment transaction volumes during certain times of the day, changes in market circumstances, or policy changes by the government. Furthermore, the infrastructure had to deliver the consistency that Paytm and its merchants needed to manage e-commerce services constantly.
Threats to Paytm
Environmental variables that can harm a company’s growth are known as threats. Paytm’s threats include the following:
- Competition: Paytm is up against stiff competition from platforms like PayU, Razorpay, PayPal, and others, all of which are vying for the same market share as Paytm. Paytm has always been vulnerable to competition and will continue to be so in the future.
- Fraud & Hackers: When we consider the scope of the company’s operations, we find that it operates in over 3 nations. It also poses a significant security risk from hackers throughout the world.
- Strong Economic Regulations & Policies: Some nations, such as Taiwan, China, and Japan, have rigid rules and regulations that make it difficult for corporations like PayPal to set up shop there.
This ends our thorough SWOT analysis of Paytm. Let us conclude our learning below.
After an in-depth study of the SWOT analysis of Paytm, we have realised that the company has a strong position in the online fund transferring market. The company’s operations have allowed it to grow in terms of the number of consumers and money it generates.
The business should take advantage of opportunities such as increasing its market in developing countries. We are confident that Paytm will overcome these challenges and continue to be the best company on the planet.
Digital technology is also emerging, thus, the need for digital marketing is elevated throughout the years. If you are interested in grasping a skill or investing in upgrading your skills in marketing, feel free to check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
We hope this blog on the SWOT analysis of Paytm has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
If you enjoy in-depth company research just like the SWOT analysis of Paytm, check out our IIDE Knowledge portal for more fascinating case studies.
Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of Paytm in the comments section below.