The suddenness! The sheer suddenness of the move! The unexpected nature of the move!
On Wednesday morning, digital payments player Mobikwik took out a full front-page advertisement in The Hindustan Times, asking readers if they were still using a Chinese app to pay bills even after the series of bans by the Indian government. The company said that while 220 Chinese apps have been banned, many consumers are still using the 221st to make bill payments, recharges and other activities.
Describing itself as a ‘truly Indian Payments’ app, the ad called on users to use Mobikwik for all their payment needs.
The ad, coming hours after the Indian government banned 43 more Chinese apps citing national security concerns, was clearly a dig at larger competitor Paytm, in which Chinese e-commerce giant Alibaba owns a significant stake.
Paytm has long been fighting a social media backlash owing to its strong Chinese connect. But the millions that Vijay Shekhar Sharma-led company raised from Alibaba— as well Japan’s SoftBank—is not recent and happened when the Chinese were viewed favourably as major investors in the Indian startup ecosystem.
Social media backlash
That perception quickly changed after the clash between Indian and Chinese soldiers in the Galwan Valley of Ladakh, when the Chinese Army was looked at as an aggressor and there was a massive backlash against the use of Chinese goods in India.
The government since then has also been ringfencing the Indian market from Chinese domination, by banning apps which have direct or indirect links with China and also tightening investments from neighbouring countries, including China, in Indian companies.
Gurugram-based Mobikwik which is backed by Sequoia Capital, Cisco Investments, American Express and Bajaj Finance has been trying to leverage the ‘Aatmanirbhar app’ plank to grab market share in the fiercely competitive digital payments ecosystem.
Currently, the Indian payment app ecosystem is dominated by Paytm, PhonePe, Google Pay and Amazon Pay. While the last two are owned by American multinationals, PhonePe is part of the Flipkart stable which is owned by Walmart and Paytm has Japanese telecom major SoftBank and Chinese tech behemoth Alibaba as large shareholders.
Mobikwik was founded by Bipin Preet Singh and Upasana Taku as a digital payments application. While it was a major competitor to Paytm and Freecharge in the initial days, it lost out on the race to capture market share to Paytm. Vijay Shekhar Sharma owned Paytm commands a valuation of approximately $16 billion, while Mobikwik has raised around $120 million. But the company has expanded its product suite from simple payments to a broader financial services platform and is aiming profitability.
Mobikwik is also looking for an Initial Public Offering in 2022.