PhonePe has launched Pincode, a new consumer-facing application, which will be a part of India's Open Network for Digital Commerce (ONDC) framework as the Walmart-backed fintech decacorn looks to strengthen its e-commerce forays, three months after Flipkart completed full ownership separation of the payments startup.
Pincode, a buyer app, will focus on hyperlocal commerce and is available for download on both Google Play and the App store, Sameer Nigam, co-founder and CEO, PhonePe said at its launch in Bengaluru. Pincode will launch in six major categories including grocery, food, pharma, electronics, home decor and fashion. Starting with Bengaluru, Pincode will expand city by city, Nigam said. However, the company plans to limit its expansion to no more than 10 cities in the first year.
Customers can search for stores by browsing for category and can have multiple carts at the same time with one active cart per store. Buyers can also save multiple carts.
Nigam said that they aim to have one lakh orders a day by December on the app.
PhonePe marks the first time that there is a dedicated app by a player for ONDC. ONDC is an initiative of the Department of Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce.
ONDC’s rollout started with limited pincodes in Bengaluru last September. So far, apart from Paytm, IDFC, Mystore, Craftsvilla and Spice Money are all buyer-side applications.
In March, ONDC expanded into mobility as well apart from food, grocery and e-commerce, as the network onboarded Namma Yatri onto the platform. While two cities are in ONDC’s beta stage, 181 are in the alpha stage.
PhonePe currently operates in the e-commerce space with 'Switch' and has various services such as hotel and travel booking, food and grocery delivery, online pharmacy, metro booking and other essential services live on it, similar to that of its biggest rival--Paytm. An ONDC foray will further put PhonePe in direct competition with Paytm which already has an ONDC platform integrated with its application.
Moreover, PhonePe's move to launch a new consumer-facing e-commerce app comes on the heels of its massive $1 billion fundraise that it announced earlier this year. The company has already raised $650 million from a clutch of investors including General Atlantic, Tiger Global, and Walmart among others. The fundraise made PhonePe India's most valued fintech startup by giving it a valuation of $12 billion.
PhonePe said that it would be using the funds for making investments into infrastructure, including the development of data centers, alongside investing in new businesses, including insurance, wealth management, and lending. PhonePe will also focus on UPI lite and credit on UPI.
While PhonePe's new funding made its valuation over 2x bigger, and much more than the market capitalisation of Paytm, which got listed in November 2021, its FY22 (2021-22) revenue was less than half of Paytm. As of FY22, Paytm had a revenue of Rs 3,892.40 crore, while PhonePe had a revenue of Rs 1,646 crore. The Walmart-backed company's newer initiatives such as lending and strengthening e-commerce forays may thus give a fillip to its revenue in coming quarters.
PhonePe was founded in 2015 by former Flipkart executives Sameer Nigam, Rahul Chari, and Burzin Engineer. The fintech has over 400 million registered users and is the market leader in Unified Payments Interface (UPI) transactions. In terms of monthly UPI volumes, the company has a 47 percent market share.
In 2017, the company expanded into financial services, allowing customers to buy gold, insurance, and mutual funds on its platform in addition to making bill and utility payments.
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