PhonePe launches e-commerce app Pincode on ONDC network
PhonePe operates in the e-commerce space with Switch and has services that are similar to its biggest rival, Paytm
PremiumFintech giant PhonePe has launched a new consumer-facing application, Pincode, which will be integrated into India's Open Network for Digital Commerce (ONDC) framework, the company announced on Tuesday.
The Walmart-backed decacorn's move is part of its efforts to strengthen its position in the e-commerce space, following the complete ownership separation of payments startup Flipkart.
Currently, PhonePe operates in the e-commerce space with Switch and has services that are similar to its biggest rival, Paytm. The ONDC integration will put PhonePe in direct competition with Paytm, which already has an ONDC platform integrated into its application.
The new buyer app will focus on hyperlocal commerce and is available for download on both Google Play and the App Store, said Sameer Nigam, co-founder and CEO of PhonePe during the launch event.
In an interaction with Mint, chief technology officer Rahul Chari said that the model PhonePe is following through Pincode can be replicated throughout India, just like how UPI was scaled
Pincode is launching in six major categories, including grocery, food, pharma, electronics, home decor, and fashion. It will start from Bengaluru and expand city by city, said Nigam.
Customers can search for stores by browsing categories and can have multiple carts at the same time with one active cart per store. Buyers can also save multiple carts. Chari noted that Pincode is planning to limit its expansion to no more than 10 cities in the first year.
PhonePe's foray into the e-commerce segment comes as the company is raising $1 billion at a $12 billion valuation. PhonePe has raised $650 million from several global investors. In the first tranche of the $1 billion fundraise, PhonePe raised about $350 million from General Atlantic, Ribbit Capital, Tiger Global, and TVS Capital Funds in January.
The fintech firm, which completed its separation from Walmart-backed e-commerce giant Flipkart earlier this year, moved its domicile from Singapore to India, a move that cost the firm’s investors a whopping ₹8,000 crore in taxes. PhonePe was acquired by Flipkart in 2016.
With the domicile separation, existing shareholders of Flipkart Singapore and PhonePe Singapore, led by Walmart, bought shares directly in PhonePe India. This was aimed at allowing both companies to chart their own growth paths and maximize enterprise value for their shareholders.
Founded in 2015 by Nigam, Chari, and Burzin Engineer, PhonePe forayed into financial services in 2017 and has since introduced several mutual funds and insurance products on the platform. It claims to have more than 450 million registered users and 35 million offline merchants spread across India, covering 99% of pin codes in the country.
ONDC is a non-profit company set up by the commerce ministry to create a model that democratizes digital commerce, and focuses on small merchants and retailers to access the networks or technologies offered by e-commerce giants including Flipkart and Amazon.
Overall, PhonePe's move into the ONDC framework is a significant step towards its aim of strengthening its position in the e-commerce space. The company's decision to limit its expansion to no more than 10 cities in the first year.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
