Face Off  Vijay Shekhar Sharma, CMD, One97 Communications

VIJAY Shekhar Sharma, chairman and managing director, One97 Communications is touted be the next big player in the Internet space. Sharma, aged 34, whose company runs mobile wallet service under the brand Paytm, has managed to grab the attention of Jack Ma, the owner of China’s e-commerce powerhouse Alibaba. With Alibaba set to invest about $500 million in One97 along with SAIF Partners who is putting in $50 million, the valuation of the company is expected to cross $2 billion, making Paytm India’s most valued Internet venture.

When not busy building his business, Sharma scouts for mobile internet start-ups, where he invests through his company, One97 Mobility Fund. In a conversation with FE Brandwagon’s Anushree Bhattacharyya, Sharma talks about his company and the reasons behind its success. Edited excerpts:

With Paytm gaining so much popularity, where does it leave One97?

One97 is the company which runs the brand Paytm which is our payment and mobile commerce platform. As the parent company it has traditionally been running a large mobile marketing cloud business. It has been working with brands and telecom operators
generating tonnes of revenue. It continues to be our key pillar of strength. This business generates free cash flow for us and allows us to have more than sufficient funds. So not only does One97 continue to exist, it continues to grow at a rate of 30% year-on-year. One97, our mobile marketing business, has 70-80% market share. The vertical is currently doing gross merchandise value (GMV) of about $300 million.

What made you enter the mobile wallet market and later launch a mobile commerce platform?

We could have entered the content service or music streaming business but we chose payment because it is the most essential branch of a tree. We thought of creating a safe payment gateway first which could be later used to enter other businesses online. In fact, we entered mobile commerce after the launch of mobile wallet service.

As of today the payments business is doing $750 million GMV, followed by the marketplace, that is the mobile commerce business, which is generating GMV of about $600 million.

What has made Paytm so popular so quickly?

The reason for its success is the increase in the number of smartphones and consumers willing to buy online. Within a month of the app launch, it registered 50,000 money transfers on a single day. We have a simple value proposition that we allow consumers to store their payment tokens such as debit/credit card details, cash under a single roof. Also the app allows to transact with a single click. So I believe consumers prefer us because of ease of shopping and the app being totally safe.

You have managed to grab Jack Ma’s attention. What makes you such a lucrative deal for investors?

Mobile and our uncanny mobile focus and our user base is what makes us an attractive deal for investors. In terms of scale and revenue what we have managed to achieve in two years, companies have not been able to achieve in five-six years. Secondly, what draws investors to us is our
capability to make most of every dollar being spent. We started Paytm at the end of 2011, when the company was valued at $300 million and today our valuation has grown manifold.

While you have three business verticals, you seem to be riding your recharge business in your communication?

Paytm has a user base of 25 million of which 20 million are mobile wallet customers. The reason we are using recharge to reach out to the new lot of users is because we believe that recharge is the first transaction that a consumer tends to make. It is very natural that before buying a big ticket product online one likes to try by spending a nominal amount and recharge allows to do that. Recharge is the anchor vertical for us and has allowed us to bring new consumers.

How do you plan to expand the business?

To begin with, we would increase the number of merchants by signing up a million more. Next, we are planning to add new features in our mobile wallet. For example, one of the features that we intend to introduce will allow transfer money from one person’s wallet to another’s digitally. We are also working towards increasing and building our technology team based in Canada and Bangalore. We are also building capabilities for fraud detection.

Additionally we are working towards increasing the number of staff in the support team to help consumers as well as merchants, who are new to the digital eco-system. We are also planning to run online courses and training programmes for merchants..

With logistics being a big issue in e-commerce, we are building a comprehensive logistics cloud which will feature many courier companies.

This service will give merchants access to a large number of logistics company from which they can select a company to send their product.