Paytm is an e-commerce company that is catering to the Indian audience. The vernacular approach of the company has made it one of the most popular applications in the country. During the demonetization, which made almost all of India adapt to digital payments method, Paytm’s use shot up and its use also became regular. The application is popular all around the country and is available in eleven languages. Paytm is valued at $10 billion.
The company has products like Paytm Mall, Paytm Payments Bank, Paytm Money, and Paytm Gamepad. However, there is something the Noida-based company did not have, the subscription feature. Amazon has Prime, Flipkart has a Plus program that is going on for them but Paytm has nothing. That said, Paytm has now announced its subscription program known as Paytm First. This feature will be a paid service and will give its users an added advantage over others.
Amazon Prime is a prime example of how the subscription plans work in favor of the company. The retention of the customers is key and Amazon Prime achieving that. The American giant first launched prime at a price of INR 499 for a year as a discounted price. That was a bold move and it worked as many of them used the Amazon Prime. Out of the 80 million annual users, there are around 20-30 million users which are valued by the company. Out of every three products sold by Amazon, one is ordered by a Prime user.
Such is the power of subscription-based privileges. Paytm First is also going to target a similar type of customers. This subscription will allow its customers access to added incentives, exclusive deals and this will be for all the products, within and outside of its ecosystem. Even external partners such as Zomato, Uber, Gaana will come under the given incentives.
Paytm has invested around INR 250 crore in this idea. This is mainly to reduce to the customer weakening and increase the retention of the same. The user attrition is bound to decrease by 50% after this feature hits the application. The price of this subscription is in line with the other companies. Paytm will offer Paytm first for INR 750 per year. While Prime is available for INR 999 and Flipkart doesn’t charge for its Plus service but depends on the coins collected by the users which could be redeemed.
The consumer retention, after which Paytm is running around with its First feature, can be possible. Satish Meena of Forrester, a market research firm, was of a similar opinion. “This is for consumer retention, clearly. This could give Paytm the advantage against rising competition in the core payments play from PhonePe, Google. While Amazon is a preferred shopping destination, it remains to be seen how this will play out for a player like Paytm. Subscription products that are simple and easy to use will see good adoption,” Satish told ET.