Paytm is an electronic payment and e-commerce portal that operates from India. They are headquartered in Delhi NCR, India. The company has been in operation for seven years since August 2010, it is owned by the company One97 Communications. Paytm stands for Payment through Mobile and as the name indicates the money can be transacted online. The company currently has more than 13,000 employees and also transacts with 3 million offline merchants across India.
In addition to the portal the company also owns the Paytm payment gateway and the Paytm Wallet. Paytm achieved a major landmark by securing funding from the Chinese e-commerce kingpin Alibaba after it raised over $625 million at a valuation of $1.5 billion. Currently, Alibaba Group holde the highest stakes the owner company of in Paytm, One97 Communications.
Strengths in the SWOT analysis of Paytm :
Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Paytm:
- First mover advantage: Paytm was the first online payment company to set up operations in India. Their timing was perfect since they started operations at around the same time when smartphones started becoming popular.
- Convenience options: Paytm is an epitome of convenience since it is operational round the clock and facilitates easy payment or transfer of funds anytime, anywhere. This makes it increasingly accepted by an urban population who rely on online shopping for even daily use items.
- Tie-ups with merchants: Paytm can be used to transact with more than 3 million merchants across India and the number is said to be growing every day. This makes Paytm an easy shopping option for most customers irrespective of their economic background or education.
- Bucket of services: Most of what one desires to do online can be done through Paytm.In addition to the Paytm Wallet, today the brand has online reservation facilities, online retail, and online recharge and there is also no need to go through payment gateways of you are using paytm.
- Offers: Paytm has been able to grab and hold the attention of customers primarily because of the never-ending offer stream it has been announcing.these are custom designed with the Indian mindset in the frame and thus works like magic for zooming sales.
Weaknesses in the SWOT analysis of Paytm :
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Paytm are:
- Need for IT infrastructure: If Paytm functions have to be robust there has to be good bandwidth and speed. This may be there in most cities in India but may not the case in remote locations or even tier 2 towns.
- Lack of awareness amongst users: Most users are unaware of what Paytm can do for them and confused about how the app needs to be used. The level of awareness of technology tools and the inherent fear of making erroneous transactions is making things worse.
- Fear of going cashless: Most Indians are used to transacting on cahs and are yet to get used to being used to cashless transactions. However, with digitization and demonetization, things are expected to pick up and this will help online wallet services.
- Poor customer care: One criticism leveled against Paytm is its poor customer service. The app and the portal cater to a wide variety of customers whose concerns may be minor.It is alleged that the call center executives are often rude and unable to handle many of the queries,
Opportunities in the SWOT analysis of Paytm :
Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include:
- Growing demand for aggregators: Aggregators and middlemen are in demand everywhere today.With growing technology usage people prefer to make most payments from the convenience of their homes.This has increased the role of payment aggregators in India.
- Demonetisation: One of the services that benefitted heavily from the Indian government’s demonetization drive was online payment services and Paytm was one of the biggest beneficiaries. In a move to digitize the country, such services will have more opportunities coming their way.
- The surge in the number of working professionals: The number of working professionals are increasing profusely. This means that for most couple’s time is scarce making them rely more on home delivery services for their sustenance. When the demand for online shopping increases there will be a corresponding increase in the payment portals as well.
Threats in the SWOT analysis of Paytm :
Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:
- Competition: With lowered barriers to entry, every new entrepreneur is looking at aggregating services. There are a lot of online portals like pay charge, mobikwik etc and even telecom service providers like Airtel and Vodafone are providing online payment gateways.
- Growing concerns about safety: Today there is negative imagery of information security and tracking of shopping habits. There is also growing concerns about how safe the information submitted to payment portals are and the level to which such portals or payments made through them are monitored.
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