As of 2023, India has 103 unicorns and notwithstanding economic headwinds the country added 23 unicorns in 2022. These included the likes of Fractal, Uniphore, Hasura, Yubi, Amagi, CommerceIQ, Open, LeadSquared, ElasticRun, LEAD School, Physicswallah, 5ire, Drawinbox, DealShare, Livspace, XpressBees, Purplle, ShipRocket, Tata 1mg, Oxyzo, Games24x7, Molbio Diagnostics and OneCard among others.
As fears of recession loom in 2023, unicorns are bracing themselves for funding challenges with poor valuations. Several start-ups have laid off employees and discontinued their non-profitable verticals as part of their cost-conservation approach as they focus on profitability.In light of that scenario, APAC News Network decided to conduct a SWOT analysis of the Top 10 unicorns in India (Flipkart, Paytm, Byju’s, OYO, CRED, PharmEasy, Meesho, BharatPe, Urban Company and Dream 11). Though for most of them profitability is still some way off and often mired by controversies, the general verdict from APAC News is the Unicorns Even if Temporarily Down, are Definitely Not Out.
Flipkart: India’s Amazing Answer to Amazon
Founded in October 2007 by Sachin Bansal and Binny Bansal and Headquartered in Bengaluru and incorporated in Singapore as a private limited company, this e-commerce company has a current valuation of $37.6 billion.
Flipkart has tied up with various firms such as Myntra & Jabonng(fashion) & Phonepe(digital payments) to strengthen its portfolio. Apart from that, Flipkart has also made alliances with Walmart & Aditya Birla Fashion and Retail Limited (ABFRL) because it wanted to enhance the consumer fashion experience and online retail in face of stiff competition. Flipkart also ventured into diverse product lines in the past with the launch of Flipkart Video – an in-app streaming service.
Flipkart has consistently been able to establish tie-ups with likes of Myntra, Jabong, Walmart because it wanted to solidify its position. Having a separate brand pertaining to fashion and one for digital payments (PhonePe) contributes greatly to brand equity. Further, Flipkart has entered many strategic partnerships like Ekart, Chakpak, Letsbuy, Walmart etc. This enables Flipkart to bolster their logistics, payment gateways and digital content creation.
SWOT Analysis
Strengths
Large Company: Flipkart is India’s largest e-commerce company, with a GMV (gross merchandise value) of $1 billion.
Market Share: Flipkart has a market share of 39.5%.
Financials: Flipkart has annual revenue of 6.1 billion US Dollars.
Financial Support from Wal-Mart: Flipkart has 77% stake in Wal-Mart a global retail giant. Whose Prior experience in the E-commerce industry aided the founders in strategizing and differentiating their business in a highly competitive market.
Acquisitions: The Company’s series of acquisitions, including chakpak.com, weread.com, Letsbuy.co, Mine360, and Myntra, has assisted the company in its expansion into the E-commerce space by leveraging the capabilities and existing resources of acquired companies.
High brand recall: Flipkart has established itself as a renowned E-commerce company in India through television advertisements, online branding, and its presence on social media platforms. Brand activities such as the “Big billion day” have significantly increased the company’s brand recall.
Own Payment Gateway & Logistics Arm: Having its own Logistics arm is advantageous. The company has been able to control its expenses through E-kart and the payment gateway Payzippy. As a result, the benefits are passed on to the end users.
Exclusive and broad product range: Having exclusive rights to launch some products, such as Motorola Mobiles, Xiaomi Mobiles, Oppo, Vivo, and personal designers segments in the garments category, has helped the company differentiate and localise its offerings.
Brand Portfolio: Flipkart has built a strong portfolio of brands. The SWOT analysis of Flipkart clearly confirms this element. This organization’s brand portfolio can be extremely useful for them if they want to enter new product lines.
Launch New Products: Highly regarded when it comes to launching the new products.
Good ROI: Flipkart is relatively successful at the execution of new projects and it generates good profits through its existing business. Company is generating good Return on its investments.
Good Promotional Income: Flipkart charge extra for promoting products of its seller. This model always is beneficial for the company.
Large Employee Base: Flipkart has an employee base of 30,000+ employees.
Good Training and Development Programmes for its Employees: High level personal skills can be acquired through training and development programmes. Flipkart is providing continuous training and development of its employees resulting in an enthusiastic and motivated team.
Weaknesses
Limited Distribution: Flipkart has limited channel reach, though the logistics department has kept costs low. This is a weakness of the company as it has limited reach. Global giants like Amazon and eBay can deliver their products to any part of the country thanks to outsourcing. Flipkart, on the other hand, is still struggling in this area.
Cost of Acquisition: Since Flipkart acquires a large number of customers through online advertising, the cost of acquisition is high due to stiff competition in the market and low customer retention. According to Flipkart, the company spends an average of Rs. 400 to acquire a new customer.
Buyers have the power: Since there are a large number of players in this industry, buyers have a large number of options to choose from. Shoppers save money on switching costs as they can easily switch from one online retailer to another. The same products are offered on multiple online retail websites. There is virtually no product differentiation, so the battle is solely on price.
Opportunities
Business expansion: By focusing on other emerging markets, a company can increase its revenues while also benefiting from economies of scale.
Expanding product categories: This will increase their customer base while decreasing the cost of acquisition and customer switch.
The changing mentality of Indian customers: As an increasing number of customers become more comfortable with online shopping, as well as an increase in the number of Internet users in India, there is tremendous opportunity in this industry.
Supply chain: By optimising their supply chain, they can compete with the other players and manage the sales that are lost as a result of not being able to make the product available due to delivery constraints.
Establishing operations in other developing economies: Similar to Amazon, Flipkart can gradually begin to expand its operations outside of India and establish operations in other countries as well, which will aid in the growth of its revenues.
Consumer Behaviour: The new trends in consumer behaviour will open up new opportunities for Flipkart. This has given a great opportunity for the organisation to expand revenue streams and to diversify into new product categories.
Threats
Intense competition: There is fierce competition between global players like Amazon and eBay and local players like Snapdeal, Tolexo and Shopclues who are constantly trying to take market share from each other.
Government Regulations: Government regulations on issues such as foreign direct investment (FDI) in multi-brand retail have significantly hampered the growth of the e-commerce industry in India.
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Paytm: India’s Digital Payment Pioneer
This fintech was started by Vijay Shekhar Sharma in 2010. Based in Noida, the current valuation of One97 Communications (that company owns Paytm) is at $5 billion. It specializes in digital payment, e-commerce and financial services.
The payment methods supported by Paytm are Paytm wallet, postpaid, payments bank, debit cards, credit cards, net banking, UPI, and EMI. As per the statistics of the company, More than 20 Million merchants & businesses are powered by Paytm to Accept Payments digitally directly into their bank accounts and Paytm wallets. Paytm also uses various advertisements and paid promotional content to generate revenue.
PayTM offers a variety of products & services, including
- Paytm Mall
- Paytm Payments Bank
- Paytm Money
- PayPal
- Gamepad
- Paytm Smart Retail
- Payment system
- Mobile payments
- Online shopping
In addition to the portal the company also owns the Paytm payment gateway and the Paytm Wallet. Paytm achieved a major landmark by securing funding from the Chinese e-commerce kingpin Alibaba after it raised over $625 million at a valuation of $1.5 billion. Currently, Alibaba Group holde the highest stakes the owner company of in Paytm, One97 Communications.
SWOT Analysis
Strengths
First mover advantage: Paytm was the first online payment company to set up operations in India. Their timing was perfect since they started operations at around the same time when smartphones started becoming popular.
Convenience options: Paytm is an epitome of convenience since it is operational round the clock and facilitates easy payment or transfer of funds anytime, anywhere. This makes it increasingly accepted by an urban population who rely on online shopping for even daily use items.
Tie-ups with merchants: Paytm can be used to transact with more than 3 million merchants across India and the number is said to be growing every day. This makes Paytm an easy shopping option for most customers irrespective of their economic background or education.
Bucket of services: Most of what one desires to do online can be done through Paytm.In addition to the Paytm Wallet, today the brand has online reservation facilities, online retail, and online recharge and there is also no need to go through payment gateways of you are using paytm.
Offers: Paytm has been able to grab and hold the attention of customers primarily because of the never-ending offer stream it has been announcing.these are custom designed with the Indian mindset in the frame and thus works like magic for zooming sales.
Weaknesses
Customer Service: Several customer service concerns, including a lack of a helpline number and FIRC filing delays, are widespread. Call centre executives at Paytm are often rude and unable to handle many of the queries.
Experiencing Fraudulent Activities: Electronic transactions are unquestionably straightforward, convenient, and appropriate. Even yet, it demands a certain amount of risk. As a result, you’ll need technical assistance as well as a secure mechanism to complete the transaction and transfer payments.
Requires an Internet Connection: The entire transaction mechanism for sending and receiving money, as well as opening an account, is reliant on the internet and a fast connection. It can function in both advanced and developed environments. Paytm services, on the other hand, would be ineffective in growing economies and developing countries where internet availability is a major concern.
TDR Rates That Are Higher: Their TDR rates for payment gateways are slightly higher than other companies.
IT Infrastructure: As Paytm can work only on the internet, it most of the time makes things worse for the user when he/she is zero with cash and relies on Paytm payments at the time of merchant payments. The internet issues can occur in rural areas, remote locations and even tier 2 cities.
Services Creating Confusion: Sometimes offering lots of services can also be confusing for users as most users are unaware of all the services that Paytm offers. The level of unawareness of technology and fear of online transactions is making things worse.
Fear of Losing Money: Indians still have fear of doing online payments and transactions as most Indians are used to transacting in cash. But things are evolving so the people of India will. Secured digitalization will soon pick up online wallet services.
Opportunities
Digital Cryptocurrency: Freelancers and online users are increasingly using digital crypto-currencies such as bitcoins. Many platforms are even willing to accept cryptocurrency. Many variables, such as digital literacy, internet connectivity, and the internet, have contributed to its growth. It also opens the door for Paytm to either launch or begins accepting this currency.
From Cash Economy Towards Digital Economy: Developing economies, such as India, are aiming to go cashless or reduce their reliance on the currency. It presents a fantastic chance for Paytm to expand its services to capitalise on the potential.
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Infrastructure: Paytm requires an infrastructure that can handle the goals as well as expected quick growth in demand following the launch. Infrastructure is also required to handle demand changes.
Threats
Competition: Paytm is up against stiff competition from platforms like PayU, Razorpay, PayPal, and others, all of which are vying for the same market share as Paytm. Paytm has always been vulnerable to competition and will continue to be so in the future.
Fraud & Hackers: When we consider the scope of the company’s operations, we find that it operates in over 3 nations. It also poses a significant security risk from hackers throughout the world.
Strong Economic Regulations & Policies: Some nations, such as Taiwan, China, and Japan, have rigid rules and regulations that make it difficult for corporations like PayPal to set up shop there.
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Byju’s: Re-defining Education Paradigm
Headquartered in Bengaluru, the largest edtech in India was founded by Byju Raveendran and Divya Gokulnath in 2011. With over 115 million registered students, Byju’s is currently valued at $22 billion.
Over the last three years, BYJU’S has acquired multiple companies whose integration with its core business is now complete. BYJU’S India K-10 business, which includes Toppr, Meritnation, TutorVista, Scholar, and HashLearn, will now be consolidated as one business unit, other than Aakash and Great Learning which will continue to function as separate organisations. To avoid redundancies and duplication of roles, and by leveraging technology better, around five percent of BYJU’S 50,000-strong workforce is expected to be rationalised across product, content, media, and technology teams in a phased manner.
At a group level, BYJU’S will continue to hire across all levels and will end this financial year as a net hirer. BYJU’S plans to hire a total of 10,000 more teachers in the coming year, adding to its current strength of 20,000 teachers. To fuel its growth, the company is expanding its teams along with hiring senior leadership to further build operational strength.
There will also be retargeting of the marketing budget towards more efficient growth. Since significant brand awareness has been created in India over the past few years, there is a scope to optimise marketing budgets locally and prioritise spending to increase brand awareness in overseas markets.
BYJU’S is also reinventing its sales model to focus more on inside sales, using video calling platforms which in turn will enhance customer experience and reduce operational costs. Multiple inside sales hubs will now be created across India from where BYJU’S sales associates will reach out to incoming leads through calls, email, and Zoom meetings. Inside sales will lead to higher customer satisfaction and lower costs.
SWOT Analysis
Strengths
First Mover Advantage: The main strength of Byju’s is its first-mover advantage in many segments. It has tested many areas of strategy. Various execution solutions have helped Byju’s app in forming many unique solutions to cater to all markets.
Various Products: Byju’s provides various kinds of products. Byju’s presents content in many formats like visuals, theories, and stories. Content is available in regional languages as well. Byju’s provides various learning options to the students. This has enabled byju’s app to create various revenue sources and a mix of profits.
Strong Financial Position: Byju’s has a strong balance sheet and this is the main strength of the brand. Due to this, the company can invest in many other products and use the latest technology. This is yet another strength for the brand.
Customer Retention: Byju’s is ideal for student engagement with any kind of study material. Students spend at least 40 mins once they are into Byju’s app. Due to this, Byju’s has high customer retention, and is one of its strengths.
Involvement in Harvard Case Study
In the year 2017, Byjus the learning app became a Harvard Business School Case Study. This is a great achievement for the brand and it has reached the international level.
Acquiring Competitor: Acquiring White Hat Jr. for $300 million and Akash Institute for about $1 billion is a big hit for the company. It has helped in its growth and has helped to come up with many learning programs.
High Quality Lessons: Byju’s provides high quality lessons having a mix of video lessons, interactive tools, and various assessments. It helps students to personalize their learning. They also include animations and visual graphics for better engagement.
Customer Loyalty: Byju’s always aims to provide excellent products with great quality. Its content is always updated and involves the latest teaching methodology. Due to this Byju’s has many loyal customers which is one of its key strengths.
Celebrity Involvement: In the year 2017, Byju’s partnered with Shah Ruk Khan to celebrate young minds curiosity and the significance of loving what they learn. This is welcomed by many youngsters and has become its strength.
Weaknesses
Low Return On Investment – Even when the company has a strong balance sheet, the return on investment is low due to the high expenses which it has to incur.
Bad Reviews – There are two sides to each coin. So, along with positive reviews, there are also negative reviews by many customers who are not satisfied with the service and find it expensive.
Inventory Management – The company faces challenges with proper inventory management.
Less US Children Enrollments – The company wish to grow in the International market but the number of US Children enrollments is declining.
Opportunities
Increased Trend of Online Education – With the increase of e-commerce in India, the trend of education has also increased over the last few years. Everyone wants the comfort of being anywhere for studying.
Education due to Covid -19 – The education sector has been adversely affected due to Covid-19. It has given a great opportunity to Byju’s to increase its market as more and more people are dependent on online education.
NEP 2020 encourages online education – The New Education Policy has laid great emphasis on online education and the Govt. is completely supporting it.
Introduce Professional Courses – Currently, Byjus is only providing classes for school students and preparation for competitive exams like JEE and CAT. Further, it can provide classes in technical and professional courses, extracurricular activities, coding, etc.
Untapped Semi-Urban and Rural India – Byju’s still had opportunities for targeting major segments of India i.e. Rural and Semi-Urban. These people are also adapting to the new trend.
Threats
Imitating its Business Model: Byju’s business model can be easily imitated by many new entrants. It is easy to do so and this is a major threat to the brand. When many new entrants use this model, customers will have wide options.
Data Privacy: Data privacy is very important for companies like Byju’s. Any kind of leak in data loses customer’s trust and it is a threat to the company. Data will have to be controlled carefully.
Competitors: Many ed tech companies are a serious threat to the brand. Competitors for Byju’s are increasing and this is a major threat to the brand.
Economic Recession: When there is an economic recession in the country, people tend to spend less money on online classes when they are already students attend public schools. This is also seen as a threat as the company will not get many customers.
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OYO Hotels & Homes: Ensuring Comfortable Stay
Founded in 2013 by Ritesh Agarwal, the OYO group has expanded expanded into a chain of leased and franchised hotels, homes and living spaces across 500+ cities in India with 18000+ hotels and 270,000+ rooms. The company is currently valued at $9.6 billion.
OYO Rooms strategies on quality service at affordable price. They target the middle-class people who do not want to spend much but prefer living a quality stay.
OYO Rooms offer hotel owners standardized services and also provides basic amenities and supplies. They allow the hotel owners to get the reservation of their rooms booked through the brand name of “OYO”. They use the website and mobile application for this purpose. The part of the earning goes to the owner and some portion goes to OYO.
OYO Rooms take multiple routes to reach out to the customers and their strategy varies from country to country. Since they are majorly an online intermediary between the hotel owners and the guests, they make use of extensive internet marketing. Online ads and coupons are attractively marketed to customers. They also take the help of TV ads especially in the peak traveling and holiday seasons to promote their offerings.
SWOT Analysis
Strengths
Standardization: Of course, the rooms that OYO takes upon itself are assets of different providers. But they have a standardized OYO permit. That, in turn, guarantees the ‘OYO experience’ in the different OYO rooms worldwide.
Ever-growing network: Initially, what OYO had was a one-room resort in Gurgaon. The picture now looks so different. OYO Rooms currently owns 86500 hotels to its credit. As if that was not enough, the company also collaborates with over 4000 motels and homestays.
Spirit of innovation: At the beginning, the idea for OYO Rooms was a one-stop shop for a budget visit in India. That, by itself, was an innovative idea at the time. Till now, the company does not fail to keep introducing innovations into its business.
Subsiding hotel stays: Just like Ola and Uber, OYO also cares about making its services affordable. OYO finances different rooms to make them more low-cost for consumers.
Weaknesses
Apart from OYO Rooms, other products of the OYO chain have not been very successful.
Since the concept of OYO is based on budget hotels, the profit margins on every booking are very low.
The standardization service and quality of OYO have always been in question.
Apart from the peak seasons, the bookings of OYO rooms are normally low.
Poor in resolving issues with hotel owners leading to many canceling their contract with OYO.
OYO Rooms has been in operations for 8 years now but overall, the company is still making losses.
Opportunities
Growing demand for aggregators: The world revolves around the outcomes of recessionary trends, pay cuts, and job declines. That makes it challenging for higher-end hotels to keep up with supply and demand. That broadens the range for accumulators such as OYO. That is because a considerable number of hotels would fancy getting outer care for their new businesses.
Focus on budget accommodation: People these days tend to be smarter with the way they spend their money. Especially young people choose to save up some of their income. Hence why they are more likely going to choose budget hotels. That, in the long run, makes the job of OYO Rooms worth it.
A surge in the number of business travelers in emerging economies: In developing economies, more people are starting to go on business trips. Thus, of course, they are going to think more and more about their budget. Which, again, increases the demand for companies like OYO Rooms.
Threats
The threat of Competitors: The major profit of OYO rooms comes from the budget hotel segment and there are many emerging players like Yatra, Fabhotels, Treebo, MakeMyTrip, and ClearTrip which poses threat for the company.
Concerns of Safety: The stays are sold to customers under the brand name of OYO, which is why when anything happens wrong at a hotel, then OYO Rooms get blamed. There had been many incidents in the past where harassment, theft, and exploitation of guests have taken place which is why many people consider OYO stays as ‘unsafe stays.
Different laws of different countries: Since OYO is expanding quickly to other nations, there is always the pressure of following the local rules and complying with them.
Finance: The operations of OYO got majorly hit because of the pandemic which is why they had to shut many hotels which were not profitable.
Squeezing middle class: The finance of the general public has also squeezed in this pandemic. There is threat and uncertainty that whether they would prefer traveling and visiting new places after the pandemic or not. Since this middle class is the major target audience of OYO, this poses a major threat to the business.
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Dream 11: Making the Dream Team
Founded in 2008 by Harsh Jain and Bhavit Sheth, Dream11 is a fantasy sports platform that hosts fantasy cricket, hockey, football, kabaddi and basketball. Dream Sports (the parent company of Dream11) is at a valuation of $8 billion.
Dream11 does not monetize its company through Google ads or other ad agencies. They merely make a profit by hosting fantasy games on their website. Initially, they tried Google AdSense, but they have since stopped doing so in order to provide their users with a simple and fast user experience. This is significant because converting a free user to a paying user is difficult and expensive. Dream11 was the first app in India to launch a private fantasy gaming app. It supports all three types of gaming methods (that is freemium, premium, and private) for fantasy sports players to earn money.
The revenue model of Dream11 primarily works on two levels:
Entry-level fees from the participants to participate in the paid contests.
When the users earn on their real-time performance of the players, Dream 11 takes its cut, which accounts for about 15-20% of the total pool.
SWOT Analysis
Strengths
- Strong captured marketing
- Pricing Range
- Strong brand equity
- Celebrity Endorsement
- First Mover Advantage
- Customer Services
Weaknesses
- Operational difficulties
- High expenditure
- Need of high technology
Opportunities
- New trends in consumer behaviour
- People taking more interest in the gaming sector
- New Leagues creating new opportunities
- IPL opens up more scope
Threats
- Bypassing the potential legal hurdle
- Removal from Play Store
- Convincing people about the stigma of gambling
- Outsmarting Emerging Competition
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PharmEasy: In the Pink of Health
This online pharmacy delivery platform was founded in 2014 by Dharmil Sheth and Dr Dhaval Shah. The parent company, API Holdings Ltd is valued at $1.5 billion.
When it comes to revenue, the important income source is advertising. PharmEasy features ads on its homepage or search for results from specific pharmaceutical companies. These ads can additionally be from distinctive sectors like E-wallets, Telecom companies, or diagnostic centers.
The first approach for revenue generation is “Sponsored Listings Model”, an easy way to earn revenue. The digital platform over which the online pharmacy model works showcase the list of sponsors from pharmaceutical sectors. It includes brand logos and product displays with various schemes and offers.
The second approach for revenue generation is “Advertisement Model” which add a big contribution in revenue generation. The advertisements covers ads from various stake holders such as – diagnostic centres, insurance companies, pharma companies, banks and health care related product base firms.
The third approach for revenue generation is “Commission Model“. On the sale of each type of drug or health care delivery product the online pharmacy companies earns commission. The percentage of commission is pre defined depending upon market scenario an demand & supply sentiments.
SWOT Analysis
Strengths
Increasing Internet Technology: With the expansion and increased usage of the internet by the people its become so convenient for many to purchase things online. Especially after the pandemic and many businesses having shifted online, it’s an advantage for businesses like PharmEasy which was being run online since the beginning.
Increase Use of Mobile Health Solution: With the introduction of mobile health operating systems and apps, information can now be shared with a move of the fingertips. As mobile health becomes more widespread, solutions are rapidly increasing.
Ease of Payment: Convenient and less time-consuming payment methods.
Less Costly: Physical store pharmacies have higher costs; because of many intermediaries being involved in the sale of pharmaceutical medicines. Online pharmacies will cater in bulk by selling online; thus reducing the cost of medicines.
Convenient and User-Friendly: PharmEasy allows the users to purchase the medicine just at the touch of the fingertip, the complete process is very convenient and user-friendly.
Weaknesses
Non-Trained Pharmacist: With things turning online there are also other untrustworthy people starting up their businesses which makes people question the authenticity of authentic providers/users.
Unsafe Delivery of Medicines: It should be made sure that the ordered medicine or product is delivered in time following all the health and safety requirements.
The Belief of Fake & Low-Quality Medicines: Since the prices are made affordable for people, customers tend to think that discount means compromising quality.
Opportunities
Increase in Market Value: High rise in the pharmaceutical market from 20 billion dollars to $35 billion. One of the major reasons for this is the pandemic.
Medical Requirements at Single Platform: Consumers are examining online pharmacy as a single place accessing all their medical requirements from medicine purchases to lab tests and medical consulting.
Demand for Healthcare Services: Increase in lifestyle diseases like diabetes and cardiovascular disorders, especially among senior citizens. The expected increase in demand for healthcare services, particularly pharmaceuticals, is due to the growth within the senior population demographic.
Internet: The number of people who use the internet is growing all over the world. This means that PharmEasy has the opportunity to expand its online presence by interacting with its customers more through the internet.
Threats
Increasing Competition Between Online & Retail: The industry’s competition has increased, putting downward pressure on prices. If PharmEasy does not adjust to the price changes, it may lose market share.
Unstructured Grievance Handling System: Unpredictability of consumer purchasing behaviour.
Political Instability: Additional governmental regulations and tax policies. Political indecision in the country can be an obstacle to business, causing performance to suffer and additional costs to be incurred.
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CRED: A Credibly Incredible Story
This Bengaluru based fintech founded by Kunal Shah in 2018 offers app- based credit card payments system. The current valuation of CRED stands at $4.01 billion.
CRED uses a passive business model in which it can generate revenue without much hustle.
There are 3 Major sources Cred earns from:
- Customers who pay credit cards bills
- The CRED app.
- The Businesses that provide offers on the app.
CRED targets to garner a significant share of wealthy, affluent, and trustworthy customers who own and use credit cards. CRED partners and ties up with different businesses who offer their products to the users on the ‘Discover’ platform. This provides CRED users with a greater variety to pick from while redeeming their CRED coins.
CRED’s target audience is the 1% cream population and having data about their purchases and spending patterns helps it optimize advertisements to encourage more spending through the platform and earn commissions on sales of those products.
SWOT Analysis
Strengths
- A fast-growing TrustTech company that has total funding of over 700 million dollars within 2 years of establishment
- The company’s valuation is 4.1 billion dollars
- Nearly 6 million users are actively using the Cred app
- Users pay bills and earn rewards as coins in return
- The coins can be used to purchase special offers on Cred store
- Business partners can display and sell their products on the platform
- The app always has the updates of UPI utilities
- The loan has a ⅓ lower interest rate than credit cards
- Track record of innovation
Weaknesses
- Lending money via a p2p feature is flexible as lenders can request a withdrawal from borrowers anytime with accumulated interests of the borrowing period
- Users can only borrow a maximum of 5 million Rupees from the platform, which is quite low
- Despite the company having gathered an enormous funding, it only has roughly $70,000 in an annual revenue
- Putting financial data on a third-party platform is risky
Opportunities
- India governments can support this system to align the taxpaying framework
- Engage teenagers to utilize fintech systems
- Encourage more people to learn about fintech knowledge and its online payment system
- Members with 750 credit scores or over can borrow money via a p2p system
- The users can track and learn about their finances through the app.
Threats
- Data privacy and protection of customers are highly vulnerable to hacking
- A credit score is quite high for low and lower-middle-class people
- The Cred loan limit is relatively low as it only suits small businesses
- Governments may seek private data of taxpayers from the company
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BharatPe: Turnaround After Controversy
This Delhi-based fintech was founded in March 2018 by Ashneer Grover and Shashvat Nakrani. The digital payments platform serving more than 140 cities across India currently has a $2.85 billion valuation.
Unfortunately, the company was recently mired in the entire saga of the sacking of Ashneer Grover and his wife over alleged misappropriation of funds and subsequent public mudslinging. Nevertheless, the BharatPe business is an Indian QR code-based payments company that operates on a B2B2C model because it helps the customers as well as the merchants or shop owners/retailers and other businessmen/women. BharatPe has developed an artificial intelligence (A.I.)-based algorithm that picks up various signals—the kind of transactions a shopkeeper does, their usage of other products on the platform, etc.—which gives them an insight into the business’s cash flow. It operates an eponymous service to help all offline merchants.
Every time you make a payment at a store through the QR code the BharatPe algorithm takes note of the cash inflow at the merchant’s end similarly when a merchant pays his supplies through BharatPe the algorithm keeps note of her monthly inventory value and it also notes a spending pattern and several other parameters to estimate the Projected Savings, Income and Consistency of Income. This way without paperwork the BharatPe algorithm can decide the credit worthiness of a merchant even if he/she is in the remotest corner of the country and all the progress that our Grocery store makes is officially documented by the BharatPe’s algorithm.
SWOT Analysis
Strengths
Unique Business Model: BharatPe is a unique company in that it collaborates with NBFCs to provide customers with access to credit. This means that customers can use their BharatPe account to pay for products and services at any number of participating NBFCs. This is a great benefit for customers who otherwise may not have access to credit.
Collaboration: BharatPe has taken things up a notch by collaborating with NBFCs to launch a 12% club. This gives them a lot of advantages over their competitors who are offering the same product. With this, customers can invest and earn up to 12% interest and borrow up to ten lakhs.
Loyalty Programs: BharatPe also offers a loyalty program that provides customers with cashback and discounts at participating merchants. This makes it an ideal option for customers looking for convenient and affordable credit access.
Easier Loans: Borrowing money for a business can be difficult, especially for small businesses with low CIBIL scores. However, BharatPe has found a way to provide microloans without much paperwork by tracking a person’s transactions using products like Xtremecards. This solution accurately serves the pain points of small businesses and is the primary source of revenue for the app.
BharatSwipe Advantage: BharatSwipe is a zero rental Swipe machine, the first of such systems that India has seen. The overall business of BharatPe received a massive boost with the introduction of BharatSwipe. BharatPe has achieved a feat in a short span of around 1.5 years, which is laudable and a remarkable scale-up of the POS business.
Weaknesses
Negative Image: Beyond co-founder Grover’s now-infamous outburst against a bank employee, BharatPe’s bigger problems include alleged malpractices, financial irregularities and a toxic work culture. What is surprising was the silence of many reputed venture capitalists (VCs) who are investors and have board seats in the company.
Global competitors: Presence of the likes of GooglePay and AmazonPay could create a difficult field
Opportunities
Despite the imbroglio and all the high-level exits BharatPe is still not facing an existential crisis. The fintech reportedly had more than 75 lakh users across 150 cities, and was valued at $2.8 billion.
In fact, in July BharatPe had closed one of the highest growth quarters in its history, facilitating over Rs 3,600 crore in loans in the first quarter (April-June period) of FY23.This represented a 112% growth over the previous quarter.
BharatPe said it also reached an all-time high of $18.5 billion in annualised total payment value (TPV) — a growth of 50% over the last quarter.
Post a successful FY22 that BharatPe closed with three times growth in merchant loans, 2.5 times growth in payments and a four-time jump in revenue, BharatPe has recorded its best ever quarter in Q1, FY23.
Threats
Need to clear up its image following Grover’s exit and present a cleaner picture to the market
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Meesho: Creating Social Entrepreneurs
This Bengaluru-based social e-commerce company was founded by Vidit Aatrey and Sanjeev Barnwal in December 2015. The platform offers a wide array of apparel, electronics, cosmetics, household items and has become a zero investment reselling platform for small businesses.
Meesho helps customers get cheaper prices on products such as apparel, electronics, and jewelry. Over 70% of customers are from Tier 2/3+ cities. The resellers or affiliates curate products that fit the taste and price preferences of their social resellers. The customer sees a highly personalized product, unlike traditional e-commerce where they go through overwhelming listings to discover relevant products.
Though Meesho is a first ever brand with such business plan, many other brand share also coming up with subsidiaries to capture the market share. Some of the competitors to Meesho are:
- Bulbul
- Simsim
- Citymall
- Glowroad
- Shopsy
- Dealshare
- Shop101
SWOT Analysis
Strengths
Empowering Women Entrepreneurs: Meesho’s great strength is empowering Indian women to run their home-based businesses and build new businesses and create identities for themselves.
Easy to Become a Supplier: To become a Meesho supplier, you just need to download the Meesho app or open a website. Once your account is set up, you can start promoting your business and delivering orders straight away via Meesho.
Start with Zero Investment: To join the hundreds of thousands of resellers who are making money through Meesho, you do not have to invest any amount of money. All you simply need is to establish a reseller account and begin reselling through Facebook, WhatsApp, and Instagram.
Customer Loyalty Program: Meesho introduced VIP Membership to encourage its resellers. In this membership, if any resellers complete 15+ orders within 30 days, they get an additional 10% discount on their products.
Community Building: Meesho wants to grow as a community. That’s why they hve launched a platform called Meesho Learning Hub, where resellers can learn to sell online and grow their business.
Weaknesses
High distribution cost: The distribution costs hits hard on Meesho financials. Acquiring & retaining the users who are price conscious needs constant burning of cash. Furthermore, Meesho distribution climbed even higher than usual during COVID. The lockdown measures had seen consumers turning to fulfil essential items for home delivery which hampered the Meesho growth.
Inconsistent Product quality: Multiple Meesho buyers complain about the degrading the quality of merchandise being delivered to them.
Late delivery & slow customer service: Sometimes the products are not delivered on time. Once the product is delayed, customers gravitate towards “customer service” to know the status of their order.
Opportunities
Augmented Reality: The use of Augmented Reality can allow customers to have real-time interaction with products while remaining in their environment. This can ultimately result in higher conversion rates and lower return rates for Meesho’s products.
Crypto as A Payment Option: Shortly, crypto can become a common payment option for Meesho. This can result in a fast transaction of cash and a reduction in digital transaction frauds.
Establishing in Other Countries: Meesho can slowly start to expand outside of India, which will help them increase their revenue.
Increasing Number of Users: Numbers of internet users are increasing day by day. People are feeling more comfortable shopping online. That is why it has an opportunity to gain lots of users shortly.
Threats
Frauds & Scams: Many online fraud activities can be a matter of concern to customers visiting a website. If the website has false representation and duplicate products and neglected security, the website’s reach will be reduced and customers will no longer visit the website.
Competitors: Meesho faces competition from brands like DealShare, GlowRoad, Shop101, etc. Meesho needs to ensure that its price, quality, and technology remain at the forefront of these companies.
Data Concerns: Apart from the obvious fraud, there is a good chance that things will go wrong with online shopping especially when it comes to user data.
No Direct Interaction: In Meesho there is no direct interaction between customer and reseller. There is no scope for negotiation. People prefer to buy physically as compared to the internet for personal experience.
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Urban Company: The Household Jeeves
Earlier known as Urban Clap, this ‘At Home’ service provider was founded in November 2014 by Abhiraj Singh Bhal, Varun Khaitan and Raghav Chandra. The current valuation has jumped to $2 billion. Over the years, Urban Company decided to focus on a few select services — home maintenance and grooming/beauty.
Urban Clap rebranded itself as Urban Company in 2020, a name aligned with the company’s ambition to be a horizontal gig marketplace, with a global footprint and leadership position across service categories. It developed close integration with the supply ecosystem, which runs on various levels. The service delivery experience was condensed into five levels, to make it straightforward for customers and professionals. This became their most significant competitive advantage and it took two years to perfect this five-level model.
SWOT Analysis
Strengths
Reliable Vendors: The Urban Company suppliers are dependable and trustworthy. They provide raw materials and ingredients on schedule, ensuring the supply chain management process is secure. Direct association between the experts and clients. Services available at home, work place or anywhere preferred by the customer.
Marketing & Promotional Adverts with a Strong Capture: Through psychological and powerful message ads, Urban Company has grabbed the thoughts of their customers.
Prompt Services: Urban Company is well-known for its speedy delivery. Similarly, they guarantee delivery within thirty minutes, and if the buyer does not receive it within that time, they will offer “absolutely free corp.”
Price Range: Services are offered to consumers at affordable prices. Customers may choose from a variety of sizes and corporate offerings to suit their preferences.
Wide spectrum of services to pick from: The nature of services ranges from plumbing, cleaning, hair styling, carpentry to a gamut of other services.
Amicable and excellent administration: The customer service is prompt and action is taken immediately.
Weaknesses
Lack of Enough Outlets: Although Urban Company has a large number of franchisees for order taking, the company does not have any actual physical outlets. Often in some franchisees there is lack of reliability, and In-house unprofessionalism.
Concerns about Franchising: Scaling Up is having to deal with problems caused by disloyalty among its franchisees. Because there are so many franchises, it is difficult to keep track of each employee that cheats.
High-Tech Requirements: The company’s visions are not discussed with the technology. They are currently employing technology. To compete in a crowded market, they must invest more in their innovations.
Revenue (net): The net profits of Urban Company has been compared to their actual financial estimates and predictions. To boost net efficiency and earnings, the company must address its sales. No bills.
Security issues emerge: The antecedents of specialists who go into a client’s home are often not checked by police.
Opportunities
New Rules on the Environment: New environmental rules have the potential to create fantastic OPPORTUNITIES for Urban Company. They can obtain more benefits from innovation if environmental policies are seamless. Expansion in more innovative services.
Potential of Home Services Sector: The home services industry in India is expected to reach $65.51 Billion by 2026, growing at a CAGR of 27.2% from 2019 to 2026. From the consumer’s point of view, home services are an attractive service model as it is time-saving for the consumer as well as credible.
Changes in Demographics: Consumers in the middle class can also afford to pay for Urban Company. They have divided their market into segments based on demographics. Increment in the nature of administration. Increment in the time of conveyance.
Asian Countries’ Population: Urban Company success is critical in countries like India, Pakistan, and China. Ever growing market potential. Speedier development of scope territory.
Threats
Government Regulations: The government enacts new laws and policies every year. There are 13800 outlets, and their licenses are renewed yearly according to the rules and policies of the governments which issued these execution warrants. Change in government policies. Value wars between competitors.
Expensive: The success of existing operations and products includes several costly functions. To avoid this threat, they can focus on cost-cutting strategies. Money related misfortune. Ever growing in-house as well as external competition.
Lack of long-term Supplier Contracts: With the suppliers, there are no long-term contracts.
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