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ETtech Top 5: Paytm’s profitability push, Investors eye social commerce startups & more – ETtech.com


ETtech Top 5: Paytm's profitability push, Investors eye social commerce startups & more
Paytm‘s profitability push

What’s the news?

Paytm will start passing on the Merchant Discount Rate (MDR) that banks and card companies charge for digital transactions to consumers to help reduce the burn rate at the Noida company and turn profitable. This amounts to 1% on payments through credit cards, 0.9% for debit cards and up to Rs 12-15 for transactions by net banking and UPI.

Paytm Mall is also slashing its monthly cash burn to Rs 40 crore, from a peak of Rs 200 crore last year.

Why does it matter?

The move comes amid Paytm’s push for profitability. Paytm has been absorbing the charge and hasn’t been charging anything extra for payments made through its platform until now.

Paytm Mall also has moved away from a discounting and cashback-led business to an online-to-offline strategy, to cut its cash burn. It has also shut its national e-commerce shipping business, which entailed onboarding sellers and shipping products across the country, cut marketing spends, and trimmed cashbacks by almost 80%. The company now gets 70-80% of its orders shipped from the same city. Read more on Paytm’s profitability push across payments and e-commerce.

ETtech Top 5: Paytm's profitability push, Investors eye social commerce startups & more
Investors make a beeline for social commerce startups

What’s the news?

Venture capitalists are rushing to enter what’s being termed as the new wave of ecommerce targeted at the next 100 million internet users. Sequoia Capital-backed BulBul.tv is in talks to raise $6-7 million from CDH Investments, while Sim-Sim is in discussions with Accel Partners and Shunwei Capital for a $5 million round, and Mall91 is looking to raise $8 million from Go Ventures, the investment arm of GoJek.

What is the significance?

What’s getting investors interested is the view that the next phase of e-commerce is going to be much more discovery-led as opposed to search-led platforms such as Flipkart and Amazon. These platforms are focused on the non-English speaking population and are relying on videos and social platforms like WhatsApp.

Investors point out that as the next billion Indian internet users get accustomed to life with technology, commerce experiences will be different due to various factors such as language, community, price points and logistics. Read more.

ETtech Top 5: Paytm's profitability push, Investors eye social commerce startups & more
Indian IT security audits

What’s the news?

As Indian IT companies face a slew of cyberattacks, their clients are asking for more security audits and are looking into whether vendors are making adequate investments to keep their data safe, analysts said.

What’s the change?

Indian IT companies, which have access to client systems and their data, are significant targets for hackers. Clients typically had broad language in their contracts to ensure they were protected but with increasing attacks by hackers, more is needed. Clients are moving to introduce more audits to inspect the level of compliance and work with their vendors to ensure the appropriate security investments are made and maintained, said Peter Bendor-Samuel, CEO of IT advisory Everest Research. Read more.

ETtech Top 5: Paytm's profitability push, Investors eye social commerce startups & more
WhatsApp traceability solution

What’s the news?

India could well have a locally developed solution to the message traceability dispute with social media major WhatsApp. Professor V Kamakoti of IIT Madras said the solution would help WhatsApp to provide the phone number of the sender of a message, without tampering with the encryption which is critical to the popular messaging app.

Why does it matter?

The government has been insisting on the traceability of WhatsApp messages, especially after misinformation and rumours floating on the platform had led to a spate of lynchings in 2018.

The Facebook-owned messaging app has pushed back, saying it would infringe on the privacy of its users. Besides, it would have to change its entire architecture to embed elements to trace messages. India is the largest market for WhatsApp with 350-400 million people using the messaging application. Read more.

ETtech Top 5: Paytm's profitability push, Investors eye social commerce startups & more
Helo chases Indian creators

What’s the news?

Bytedance’s Helo aims to double its user base in India to 100 million by the year-end, as the regional social media platform aggressively pursues content creators by offering the possibility of instant stardom and future monetisation.

What is it offering?

Helo is now offering free traffic boost, staff support to eligible creators apart from an opportunity to be part of its ‘Helo Stars’ incubation program which will help 100 creators reach one million followers. It has also launched live-streaming on the application for creators to engage and interact with their audience in real-time and added analytics to make it easier for creators to understand their followers and feedback to create more engaging content. Read more.



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