Before we start, if you ask most VCs about big investment themes — they will probably mention ‘Big Data’ amongst others. If you ask them if they use ‘Big Data’ in their own business (investing), the answer will most likely and quite ironically be a ‘NO’. Just saying…
Moving on to UPI based Apps.
In an unexpected and rather surprising development, the reach of BHIM has fallen below that of PhonePe- another UPI based payments app that got acquired by Flipkart in 2016.
Fantastically and despite their best efforts (sarcasm), the reach of the government owned BHIM app has remained resilient and continues to cling on around the 8% mark. Why should you care? Indians have traditionally preferred to entrust the government when it comes to their money. This could be the first significant data point suggesting a change in the paradigm.
Even more stunning is how closely these 2 products are when it comes to more important statistics around attrition and competitive dynamics.
A 2% difference in attrition could compound itself over time but these numbers are subject to change and despite the higher churn in PhonePe — its growth speaks for itself.
On NPS — Net Promoter Scores — it’s worth noting that as an app gets larger and larger — it’s NPS changes more slowly. This is because with each passing month — a larger number of users need to rate it higher or lower for there to be dramatic shifts in rating.
The competitive dynamics between the 2 apps were more surprising. This is what they look like:
A 2% difference in attrition could compound itself over time but these numbers are subject to change and despite the higher churn in PhonePe — its growth speaks for itself.
On NPS — Net Promoter Scores — it’s worth noting that as an app gets larger and larger — it’s NPS changes more slowly. This is because with each passing month — a larger number of users need to rate it higher or lower for there to be dramatic shifts in rating.
The competitive dynamics between the 2 apps were more surprising. This is what they look like:
Since some of you may have questions around the competitive dynamics published here, I’m clarifying what this means. If for example — 3% of all users have both BHIM and PhonePe and 9% of users have BHIM installed then ~33% of BHIM users also use PhonePe.
Damn.
PhonePe has had to work hard, advertise heavily and focus on customer experience to win customers — all the while spending valuable and extremely limited capital. By comparison, BHIM has the luxury of riding on the back of a very popular prime minister and spending tax payer’s money. Presumably, there are people fighting over departmental budgets there too but I’m willing to assume their war chest is larger.
Perhaps it is a result of these circumstances and the initial organic growth spurt they enjoyed, but the people behind BHIM seem to have taken their foot off the accelerator and the results are plain to see. Alternatively, the slowing growth could be a byproduct of a much deeper problem — that digital products and digital marketing are still not the government’s forte.
It would be quite a refreshing change for PhonePe to dominate this market not just as a sign of changing attitudes but also because I’d like to believe that product > brand.
Thanks for your time,
Ashish
- Team KG
Subscribe to our newsletter here
You can reach me on ashish@kalagato.com
