Paytm to spend Rs600 crore on branding, marketing in 2016-17
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New Delhi: Mobile wallet and e-commerce firm Paytm, run by One97 Communication Ltd, will spend Rs.600 crore on branding and marketing in 2016-17, the company said on Monday. It had spent more than Rs.500 crore in 2015-16.
Paytm has already launched a Rs.50-crore advertising campaign across TV, print, radio and social media for its mobile payment app. The company expects a 40% rise in traffic across categories such as money transfer, bill payments and movie ticketing business through the ad campaign, Paytm said in an email.
Given the general slowdown in the start-up investment scenario, the increased budget of Paytm may come as a surprise to few. However, according to Mallikarjun Das, chief executive of media buying agency Starcom MediaVest, e-commerce companies are becoming more prudent in their spending behaviour.
Unlike the last three years when companies would invest heavily in brand building and customer acquisition, now the target is expected to be more on the lines of return on investment.
“In today’s e-commerce scenario it is not just about brand building, I think people want to look at return on investment. Probably in the first two-three years there was a need to acquire customers and build brand. A lot of e-commerce companies were paying premium for that. Today you would expect the e-commerce companies to be more prudent about their advertising rupee,” he said.
Last year, Paytm had bagged the title sponsorship rights for Indian cricket for four years. The deal, which covers 84 matches to be played in India under the aegis of Board of Control for Cricket in India, cost Paytm Rs.203.28 crore. The company last year had also launched multiple other business support campaigns across different divisions such as electricity bill payment, bus ticketing and offline payments vertical.
As part of its latest campaign, Paytm has launched a television commercial that showcases a range of categories where Paytm users can make payments. It shows instances wherein users can pay auto fares, grocery bills and make payments at petrol pumps through the app. It also shows them sending money to relatives, booking movie tickets and paying for utilities like electricity biils.
The advertisement highlights the QR (quick response) code scan feature of the mobile app and reflects the adoption of Paytm across different age-group. A QR code is a machine-readable label that contains information. After scanning the code, buyers just need to enter the payment amount and approve the payment.
“With this television commercial, we aim to highlight the range of categories and functionalities that Paytm brings to our users and how they can leverage it in their daily life. We have also ensured consistency and continuity with our previous advertising campaign, and taken it to the next level,” said Shankar Nath, senior vice-president, Paytm.
The company is one of the 11 recipients which has received payments bank licence. It plans to start the bank with an initial capital of Rs.300 crore and will launch the business before November, Mint reported last month.
Paytm currently has close to 130 million wallets.
According to the data released by advertising and media research company TAM Media Research Pvt. Ltd in October, India’s top 50 e-commerce firms spent Rs.1,200 crore on television advertising in the three months ended 30 September 2015, a 46.3% increase over the same period in the previous year.
While Paytm’s core business is mobile payments and mobile recharges, it has aggressively built its e-commerce marketplace over the past 18 months, selling apparel, footwear, smartphones, laptops and other products. The company is expected to spin off its marketplace business into a separate mobile app in the next three months.
In September last year, China’s e-commerce giant Alibaba Group and its affiliate Ant Financial together committed to put an undisclosed amount in Paytm. Ant Financial had committed another $575 million in February 2015.