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3 minutes read

Why Isn’t FreeCharge As Successful As Paytm in Indian Online Market?

| Published on June 11, 2018

Paytm is currently the most used digital wallet in India. The company has almost created a monopoly in digital payments market in a very short period of time. Just a few years ago, Freecharge was as famous as Paytm. So what happened in such a short period of time that the situation has completely changed now? Read some reasons below that will help you to understand why Paytm is more successful than Freecharge In India.

Also Read: Why Snapdeal Failed & Flipkart Won The E-Commerce Race?

1. Coupons vs Cashback policy


FreeCharge used to give vouchers and coupons to users which were usable on branded stores like McDonald’s, Cafe Coffee Day, KFC. Paytm, on the other hand, provided direct cashback in the wallet of the user. Psychologically, this is a better strategy as people see wallet balance as more lucrative than coupons and wallet cash can be used anywhere.

2. Ground level marketing


Paytm saw the opportunity of targeting mass number of audience in India and for this, the company ensured that small store owners and people such as milkman, hawkers use their app. FreeCharge, on the other hand, was focused on the tech-savvy audience of nation which is very less in numbers.

The tough phase

The business model of both Paytm and Freecharge is based on giving offers and discounts to users. In order to capture the market share in India, Freecharge and Paytm both started giving exciting offers and discounts from the funds received from investors. Investors backed these startups as the future of digital market in India looked promising. But how long can these companies survive the loss which kept increasing with each quarter? So FreeCharge investors realized that it is not the right path as India users switch platforms very quickly for getting discounts. This was a problem for both the companies but Paytm survived this bad phase and FreeCharge didn’t and got sold to the Snapdeal.

3. Broader vision of Paytm


Paytm used to provide only mobile recharges in the initial days but the founder Vijay Shekhar Sharma had a broader vision for the company. So Paytm expanded its business to other services like Rail booking, Flight Booking, Utility bill payment etc. This helped Paytm to get new fundings from investors as the business model of Paytm looked more promising than FreeCharge.

4. The Demonetization effect


Demonetization changed the startup scene in India, especially for Paytm. The company took the benefit very smartly by introducing advertising campaigns of Paytm from the next day when demonetization was declared. Millions of new users joined Paytm during this period. Freecharge was late to capture the interest of audience during demonetization.

If we explain in short, business model, brand vision, moment marketing and surviving the tough phase with courage helped Paytm to succeed in Indian online market.

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