Thread by @jayrajbpatel

How India’s largest startup justified a billion dollar spend on advertising.

Powered by @paper_vc

#Fintech #UPI #Payments #Marketing #Advertising #PaperVC

I’m not a huge fan of digital wallets. But, somehow, every time I need to use one, I hear that oddly sweetish #PaytmKaro melody in my head. It’s annoying. But, the jingle has done its job. @Paytm is my default payment option every time I run out of cash.

Overall, their advertising strategy has mostly revolved around emotive TV commercials, frequent full-page print ads (remember the day after demonetization?) and a sponsorship deal with the Indian Cricket team that runs till FY '23.

@BCCI

#India #Cricket #ViratKohli

And this marketing buzz and brand building hasn’t come cheap. @Paytm has spent more on advertising & promotions than it has generated in revenues for three out of the last five years.

paper.vc/spreadsheets/p…

#Advertising #Newspapers #Tvcommercials

In fact, if we take an aggregate sum of the same metrics for the last 8 years, they’ve actually spent 91% of their revenues on marketing alone, which has consistently been their biggest expense item since FY '15.

paper.vc/spreadsheets/p…

Upon adding @PhonePe_ , @amazonpay & @GooglePayIndia into the mix, it appears that they're all on the same page too.

#UPI #Payments #Fintech #Amazon #Google

While @GooglePayIndia seems to have cut its entire advertising budget post their initial launch campaign, the other two are clearly playing catch up by spending a lot more money on advertising than what they pocket in revenue.

(View company profiles on paper.vc)

If you're surprised by Google Pay's abnormally low spend on Advertising, know that it is using an entirely different approach to sell its service to #TypicalIndians

👉 paper.vc/doc/google-pay…

Now, while Paytm’s marketing cheques may have cut a deep hole in its pocket (absolute terms), the fact that it takes home almost 3/4x more rev than its closest competitor gives it the ability to freely cut that spend and pocket more money in the future.

paper.vc/profiles/paytm…

That, right there, seems to have been @vijayshekhar ’s game plan all along. @Paytm is expecting to bump its revenue by a 0.5x multiple YoY (for the next 7 years) and they expect to be profitable very soon as per their latest valuation report.

paper.vc/doc/paytm-late…

Now, while the ultimate future depends upon how @PhonePe_ , @GooglePayIndia & @amazonpay react, the one thing I’m sure of is that we are going to see some more advertising surprises as these players desperately try to lure customers away from one another.

For starters, Paytm has already launched its latest TVC for their merchant division's ‘All-in-one QR code’ product ft. @singhabhinav , the former Trivago man who is now Paytm's VP for Product Marketing.

Yes, he is more than just an ad actor🙂

#Advertising #India
----