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Home / Technology / News /  Pandemic and UPI help B2B apps expand user base at a rapid pace

Pandemic and UPI help B2B apps expand user base at a rapid pace

Apps such as Paytm for Business registered a 48% year-on-year growth in their user base in the September quarter.mint

Apps that cater to small traders, retailers and other businesses have  grown in popularity

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NEW DELHI : Business-to-business, or B2B, apps are registering high growth rates, a trend that is typically associated with consumer apps.

NEW DELHI : Business-to-business, or B2B, apps are registering high growth rates, a trend that is typically associated with consumer apps.

Apps such as Khatabook, IndiaMart, BharatPe and Paytm for Business have added “tens of millions" of users and registered a 48% year-on-year growth in their user base in the quarter ending September over the year-ago period, said Cindy Deng, managing director, APAC, at App Annie, a mobile data analytics platform.

Apps such as Khatabook, IndiaMart, BharatPe and Paytm for Business have added “tens of millions" of users and registered a 48% year-on-year growth in their user base in the quarter ending September over the year-ago period, said Cindy Deng, managing director, APAC, at App Annie, a mobile data analytics platform.

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Deng pointed out that while the pandemic has forced more users online, the availability of infrastructure such as the government’s unified payments interface (UPI) has also helped people adopt digital means like apps more easily.

Thus, even as social media remains the biggest segment in terms of usage, apps that cater to small traders, retailers and other businesses have phenomenally increased their user base in 2021.

“The beneficiaries of this aren’t just lifestyle, food delivery, grocery and entertainment apps. We are also seeing growth in the B2B space," Deng said. “We don’t see as many users on B2B apps in other markets. It’s usually around the consumer apps where you see the millions of active users. However, in India, B2B apps are actually huge," she said.

Khatabook announced a Series C funding round worth $100 million in August, taking its valuation to $600 million. BharatPe announced a $370 million funding round in the same month, taking its valuation close to $3 billion.

“India’s digital economy is on an accelerated growth curve, with the new digital consumers not just coming from urban, but aspirational India as well," said Prabhu Ram, head, industry intelligence group at Cybermedia Research, a market research firm. “B2B e-commerce startups are building digital retail platforms, partnering with kirana stores and retail stores, and enabling them to serve their consumers. Driven by the uptick in e-commerce following the coronavirus outbreak, these platforms are poised for strong growth."

The value of UPI transactions crossed $100 billion in a month for the first time in October this year, according to October 2021 data from the National Payments Corporation (NPCI). The volume of UPI transactions reached 8 billion in Q2 of 2021 alone, Deng noted and said that it is a good indication of “how the B2B space is growing" and supporting both large and small enterprises in India.

The sheer size of India’s market is allowing players to dominate specific regions, Deng said.

“On the payments side, Paytm may be stronger in the north, while Google Pay may be stronger in the west, and PhonePe in the south," she said. “When you see that no one player is dominating the market, it creates a more vibrant (app) economy," she said.

Mobile app usage had hit a new peak in India during the third quarter of 2021. In a report released earlier this month, App Annie had noted that the number of downloads in the country grew by 28% during the quarter ended September 2021, as compared to the year-ago period.

“Downloads is a starting point (to gauge the app economy). App publishers who are really able to drive engagement and retain users are the ones that will be successful," Deng said.

She noted that the daily time spent on apps among Indian users has grown from 3 hours to nearly 5 hours between 2019 and 2021.

The user behaviour in India is similar to trends that have been observed historically in developed markets such as China, Japan and South Korea, she said. The market still does not have a lot of paying users, but Deng expects monetization to be the next step for companies distributing apps in the country.

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