Paytm plans to revamp its online wealth management services and hire more than 15,000 contract marketers to get more merchants on its network, aiming to reach profitability earlier than expected.
Billionaire founder and CEO Vijay Shekhar Sharmais overhauling his suite of money management products to better take advantage of growing wealth among younger users, who are more receptive to the idea of investing online. At the same time, it is orchestrating a drive to increase its sales force to 50,000-plus people next fiscal year to try to sign up more dealers in India’s smaller towns and cities.
The twin initiatives mark an ambitious effort to turn around Paytm, officially called One 97 Communications Ltd., once hailed as a symbol of the new economy of India’s startup scene. The company has fallen about 70% from a $2.5 billion IPO in 2021 as investors worry about lingering losses, while rivals such as Walmart Inc’s PhonePE. and regulatory constraints threaten growth.
Now, Sharma says the push from wealth and merchants, coupled with cost savings from AI automation, could help Paytm turn an operating profit in less than a year. That would be faster than previous internal projections or analysts’ estimates, the CEO said without elaborating.
“We have learned and will expand our capacity to serve India, its small traders and businesses,” he told Bloomberg News at his company’s chrome and glass headquarters outside New Delhi. “We should cross about 50 million merchants signed up on the Paytm platform a year,” he said from offices overlooking condominiums on one side and a large construction site on the other.
Paytm has endured a rollercoaster ride since its 2021 IPO | Its shares recently fell on new lending restrictions
The Noida-based company had about 38 million merchants as of September, nearly 10 million of whom paid for offerings such as QR codes, sound boxes or audio payment confirmation machines and card machines.
Sharma, 45, the son of a teacher from a small town in India’s most populous state of Uttar Pradesh, founded One 97 in 2010. The company started by offering services such as mobile top-ups prepaid, but a 2016 federal phaseout of the notes gave their business a boost. It quickly grew to become India’s most ubiquitous payments brand and counted Ant Group Co. among its sponsors. by Jack Ma and SoftBank Group Corp. by Masayoshi Son.
The company launched its digital wealth management product, Paytm Money, around 2018. Its mutual fund business has done moderately well since then, but the company wants to double the business, with intel ·artificial intelligence, as India’s middle class increasingly connects to the Internet. invest in capital markets. Insurance is another fertile field given lower penetration in India, Sharma said. The total addressable market for financial services could cover 250 million of India’s 1.4 billion people in the short term, he added.
The company’s ambitions in wealth management will come up against global and local banks, from HSBC Holdings Plc to ICICI Bank Ltd., that are fighting to gain ground in this space. The country’s growing wealth management industry could be worth $5.5 trillion by 2025, according to Bloomberg Intelligence analyst Sarah Jane Mahmud.
“Young customers are moving towards it. So we’re saying, okay, let’s build our trading platform with investor protection and with recommendations, the power of AI and a high transaction success rate,” Sharma said in an interview on Tuesday.
Sharma is pushing his 10,000 technology, product and engineering teams to use Microsoft Corp.’s AI tools. and Google. This has helped Paytm reduce product development to just days or weeks. Sharma, like other companies using automation, hopes it may require fewer staff.
“We will be able to save the 10% to 15% target that we planned on employee costs, all because artificial intelligence has contributed more than we expected,” he said.
Paytm said in February that it had achieved operating profitability before factoring in the cost of employee share ownership schemes. It now wants to be fully operational, which Sharma expects will happen sooner than the company anticipates.
It has generated free cash for the past two quarters and Sharma expects that trajectory to continue. Paytm has trimmed quarterly losses and accelerated lending despite increased competition from PhonePe and Alphabet Inc’s GPay.
“This year was the year we were able to tell the world that there is a viable business model for Paytm,” Sharma said. “And starting next year, we’ll mature into another stage, which is called shareholder return.”
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