Indian mobile wallet companies dramatically increase advertising spending
Mobile wallet companies Paytm, Oxigen, Mobikwik, and PayU are expected to spend INR 7bn ($105m) between now and next March, in an advertising and marketing 'blitz' aimed at attracting new customers to their platforms. A lead advertiser of the product said, "advertising is critical for the expansion of payment apps that will help push India towards, eventually, becoming a cashless economy".
After online retailers Flipkart, Snapdeal and Amazon, it is the turn of mobile wallet companies to launch an advertising blitz across media to attract customers.

Collectively, operators of mobile wallets such as Paytm, Oxigen, Mobikwik and PayU are expected to spend ₹ 700 crore in the year to March on advertising and marketing, according to several experts interviewed by Mint.

Paytm, whose founder Vijay Shekhar Sharma was one of 11 recipients of a payments bank licence from the Reserve Bank of India (RBI) last month, alone will be spending ₹ 500 crore of that amount.

Mobile wallets are a new concept in India, and companies offering these virtual storehouses of money need to spread awareness among consumers to expand the market, said Shankar Nath, senior vice-president at Paytm (owned by One97 Communications Ltd).

The idea, he added, is to make mobile wallets a habit.

Advertising is critical for the expansion of payment apps that will help push India towards, eventually, becoming a cashless economy, said Prathap Suthan, founder of advertising agency Bang in the Middle.

“It’s aimed at youngsters across the country. Services like mobile phone recharge to getting a cab require ‘chillar’ money, effectively knocking off the cash component in your real physical wallet," Suthan said. “These companies are also fighting telecom firms like Airtel which provide their own wallets. So they need to spend on effective communication."

One97 Communications, the operator of Paytm, in July won the title sponsorship rights for all cricket matches, domestic and international, played in India for the next four years in a deal worth ₹ 203.28 crore.

The company has budgeted ₹ 500 crore, including the value of the done deal with the Board of Control for Cricket in India, for spending on cricket and other sports over the next four years, said Nath. Paytm’s next advertising campaign will roll out in the festive season in October.

Mallikarjun Das, chief executive at media-buying firm Starcom MediaVest, said: “The scale of spends by these new-age companies is definitely more aggressive compared to (companies in) sectors such as consumer products and automobiles. They are investing ahead of the curve to build awareness and interest."

Whether this ad spending will be sustained will be a function of how well consumers respond to the applications, said Das.

Money isn’t a problem for mobile wallet companies.

Investors have been pouring money into them.

In February, Chinese e-commerce giant Alibaba Group, through its affiliate Ant Financial, announced it would buy a 26% stake in Paytm for close to $575 million to tap the fast-growing mobile payments business in the country. The company is looking to raise another $400 million-plus from Alibaba, Mint reported in May.

Mobikwik has so far raised around $30 million in venture capital funding from Sequoia Capital, American Express, Tree Line Asia and Cisco Investments, Mint reported on 1 September.

Flush with funds, mobile wallet companies are trying to attract customers the same way online retailers Flipkart, Amazon and Snapdeal have been doing, with offers of discounts and by splurging on advertising and marketing campaigns.

Mobile wallets are smart phone applications in which consumers can preload money and use it to pay utility bills, book tickets and transfer money. They can also be used to make instant e-payments while shopping, in physical stores or at e-stores.

Like Paytm, Oxigen Services India Pvt. Ltd that operates Oxigen Wallet is betting on cricket. It will spend ₹ 100 crore on its latest marketing campaign—Play the Host—built around the South African cricket team’s tour of India over the next three months. The mass media campaign created by advertising agency ITSA Brand Innovations Ltd will go live on Tuesday. Oxigen Wallet is the result of a partnership between Blue Label Telecom, a South African company, and Oxigen Services India.

The campaign includes ads, promotions and endorsements featuring members of the South African team, according to Ankur Saxeba, Oxigen Wallet’s chief executive.

Online payment services firm PayUMoney has set aside a budget of ₹ 60 crore for advertising and marketing, Mint reported on 22 July.

Mobikwik, which launched its first-ever ad campaign in June, has earmarked ₹ 100 crore for advertising and marketing this year.

The company will build on this campaign and focus on phone recharges, shopping, food and entertainment offers in the forthcoming festive season, said Saurabh Srivastava, its chief marketing officer.

“The campaign which is currently on air has led to a 50% jump in the number of downloads per day for us. This shows a certain level of acceptance of the product. Users are transacting more than once," Srivastava said.