NAME ROLL NO SAP ID

Aditya Joshi B005 80011220324

Gitanjoli
B016 80011220345
Borah

Masoom
B024 80011220276
Mittal

Sakshi
B036 80011220097
Sharma

Shubham
B040 80011220073
Shripanavar
EVALUATE THE MACRO ENVIRONMENTEL FORCES AFFECTING
DEMAND IN THE CONSUMER FINANCIAL SERVICES INDUSTRY

POLITICAL FACTORS

PhonePe has stretched and diversified the portfolio from the time it started the operation. PhonePe with its parent

company Flipkart started as a money transfer and bill payments company and have grown eventually to offer

almost every service that the Fintech industry has to offer. Major changes in the government regulations have

played a vital role in the development of the company. The launch of Digital India in the year 2015 was a stepping

stone for PhonePe to start its operations. Further, a major change bought in the year 2016 by the government of

India was Demonetization that turned the financials of the country upside down. This move affected India’s

traditional way of cash transaction economy and contrived people to look for possible methods of payments.

PhonePe was one of the quick and the simplest solutions for the Indian consumers under the given scenario. The

government of India has been constantly supporting and uplifting businesses that originate in India. Their

Initiative of ‘Atmanirbhar Bharat’ focuses on promoting the growth of Indian companies. As PhonePe is an Indian

company, it received all the necessary support from the government through these initiatives.

ECONOMIC FACTORS
The reforms pertaining to monetary policies in the recent years have majorly impact the Indian economy. The key

step towards inception of the financial market was the cancellation of the set rules and regulations that restricted

the ballooning of the financial sector in India. It had an overall growth rate of 15% which has exhibited firmness

over the last few years although a lot of other markets across Asia were going through a commotion. The Finance

minister of India proposed that establishments with annual turnover of more than 50 crore shall offer low cost

digital modes of payments without imposition of Merchant Discount Rate (MDR). This further boosted the usage

of digital payments.

Considering the credit ingoing, India stands lower in the list. This is because Indian banks’ traditional processes

require heavy documentation from potential borrowers. Due to this the non-salaried individuals such as owner

ollie’s and self-employed individuals find it difficult to access the formal credit from such institutions. But, with

the increasing internet penetration and credit bureau coverage, Fintech companies find it easier to appraise

customers digitally before giving credit services.

SOCIAL FACTORS
The rise of digital payments by consumers for retail shopping has seen a growth. Services such as CreditKart

would act as a catalyst for frictionless payments with minimum touch points. Even though people have started

moving to the online mode of purchase, more than 60% of the users still prefer offline shopping. A typical Indian

consumer prefers convenience of usage over other things and PhonePe has taken a good advantage of that. The

younger generation of India which constitutes around 40 % of the total population, prefers to use digital

technology for every activity that they do. The lower middle class which forms 28% of the total population earns
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 TECHNOLOGICAL FACTORS
PhonePe is the consumer brand of one of India's leading e-commerce companies, Flipkart. The Company is

engaged in creating and designing something new for its consumers that they will feel comfortable while using.

The already set platform for digital payments will act as a technology incentive to launch the new service

CreditKart. In addition to the app’s usability, the company also strives to convert its app to super app to provide a

wholesome experience to all the customers. PhonePe keeps three principles in mind while designing products,

they are accessibility, convenience and reliability. The focus of technical team is to have a mobile application with

smooth interface and ease of accessibility. The simple design makes the UI unique although the app has taken a

complex structure of a variety of web technologies in its background. The provision of credit score facility from

other financial partners helps PhonePe in providing the new service.

LEGAL FACTORS
Budgetary guidelines are getting progressively mind boggling with major monetary foundations as they must

confirm to various guidelines expressed by the law. They need to find the fair balance between rallying of the

upcoming technologies and the need to control them legitimately. Fintech companies collect and process large

chunks of data and hence they need to ensure compliance with the data protection laws. A proper data regulation is

of uppermost importance for all the stakeholders involved. Also, the application of fingerprint authentication shows

relevant legal and ICT reliability risks, because fingerprints can be captured without the consent of customers from

the objects that they touch every day. Therefore, there is a need to adopt proper security and control measures and

also the processes to minimize the risk of using fake fingerprints by unauthorized third parties. Otherwise the

company would be considered as non-compliant with the legal requirements on biometric data processing. The

contract to be negotiated between a financial institution and an outsourcer must obey certain requirements, which

requires a proper contract management process to avoid malpractices. In an externalization habitat, failure by third

party cloud service providers to equip an adequate level of transparency could upshot in a material, legal and

security risk, often with complex cross-jurisdictional implications. This could result in a material legal and security

risk, mainly with complex cross-jurisdictional inference.

While meeting these technologies related legal aspects, PhonePe also had to face certain other legal barriers like

trademark issues against the company BharatPe. Thus Fintech companies needs to be on their toes while

considering Legal factors.

ENVIRONMENTAL FACTORS
PhonePe is playing a vital role in the digital revolution of India. PhonePe's objective is to provide support and

empower smaller enterprises in these changing times. PhonePe apprehends the importance of operating in an

ethical way that is socially acceptable and environmentally friendly. PhonePe is committed to serve the society

during natural disasters and challenging times. PhonePe as an organization was built up based on going digital in

the consumer financial services with an aim of eliminating the use of hard cash, paper & cards to satisfy the

customers. CreditKart is one such product which will be part of this platform to satisfy consumer needs on

fingertips with this eco-friendly technology. PhonePe is always committed to have cleaner and greener earth. The

PhonePe initiative of E-waste policy was launched to avoid the threats generated due to E-waste
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MARKETING RESERCH PROPOSAL/PLAN TO EVALUATE THE
FEASIBILITY OF INTRODUCTING A NEW LINE OF PRODUCT IN
THE FINANCIAL SERVICES INDUSTRY

EXECUTIVE SUMMARY
PhonePe Private Limited, owned by Flipkart and headquartered in Bangalore, the IT hub, is a digital

payment company. The first payments app to be built on the Unified Payments Interface (UPI) was

PhonePe. Their vision is “To build a large, scalable & open transaction ecosystem that creates the maximum

positive impact for all stakeholders.”

As per retail experts, the next few years would see the rise of a convergent market between the online and

offline modes. Many online stores have in the past moved to brick and mortar stores for better accessibility

and brand value, some examples of the same being Pepperfry, Nykaa, and Zivame.

The one common thread that runs in the life of a young working adult, a middle-class household, and a

shopaholic is the one that combines the anxious month-end crunches and the long wait for the “Salary has

been credited” message. But in between all this, life goes on with those urgent month-end purchases and the

quick runs to the grocery or medical shop; the last-minute birthday celebrations; or a sale that one discovers

on a walk around the neighbourhood—CreditKart is here to the rescue.

CreditKart is a new service from PhonePe that assimilates their vision with the market trends to offer a

digital khata to the consumers that will empower them and enrich their lives. It is a digital lending system

that works on the principle of deferred payments. Taking a notch higher, this facility is when one is in a

physical store and they have to make purchases of a higher value than is available with them. No exchange

of cards, no need to remember to carry a wallet, no need to wait for the salary—CreditKart will pay for

them now.

SITUATION ANALYSIS
PhonePe is planning to add on a new facility called CreditKart to a vast portfolio of services that it provides.

Although its services have been well received by a large consumer base, a strong marketing strategy will ensure

product awareness. Forming a CreditKart community across the country will be goal to be accomplished.

MARKET SUMMARY
TARGET MARKET
Working professionals, Middle class families, Shopping enthusiasts

MARKET DEMOGRAPHICS
A CreditKart facility user will have the following geographic, demographic and behavior factors
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 GEOGRAPHICS
The initial target is to expand the consumer base into Tier 1 and Tier 2 cities. By leveraging the expansive reach

of the internet, the company will capture the rural consumer base eventually.

CreditKart is set to serve domestic market only.

The total targeted population is 52 crore users.

DEMOGRAPHICS
The number of male users is a bit higher as compared to the number of female users.

Working professionals in the ages 21 to 50 will constitute the total consumer base. As individuals in the ages

21 to 35 are on an earning trajectory and are shopping enthusiasts as well, this cluster will constitute a major

portion of the consumer base.

28% of the total Indian population lies in the middle-class category and their median income is 8,66,000 INR

BEHAVIOR

Users in India are shopping enthusiasts and 63 % of the total population prefers shopping in retail stores

over online shopping.

Users prefer buying grocery and home appliances on credit and pay at end of the month.

MARKET NEEDS
PhonePe will be proving credit to the customers while they purchase in retail shops across the country. The company

wishes to fulfill the following benefits of its consumers:

ACCESSIBILITY Consumers will be able to access the service to purchase any product in a retail shop

across the country.

Consumers will find the user interface of the app extremely handy and hence they can do a
CONVENIENCE
transaction in a small amount of time.

RELIABILITY The service will be completely reliable every time the customer wants to use it based on the

credit score and hence the chances of transaction failure will be extremely less.

COMPATIBILITY The service will be compatible with the existing app and will follow the similar

procedure for payment as was used earlier

MARKET TRENDS AND MARKET GROWTH

The digital immediate payments service revolution started in 2010 in India and since then it has been continuously

evolving. Fintech industry is expected to reach $700 billion by 2022 in terms of total value of transactions. It is

forecasted that more than 80% of the people staying in urban areas in the country will adopt digital payments by

2022 and 70% of the retail chains will adopt the same. The number of internet users in India is expected to reach

975 million by 2025.

Credit service is considered as an evolving service in the Fintech industry. More and more users have started using

credit services since its inception. The credit user base in India is 50 million and the market is forecasted to grow

at a CAGR of more than 25% till 2025. The usage of this credit service by a digital payments company in a retail

store will be a breakthrough in the Fintech industry.

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 SWOT ANALYSIS

• Established brand in the • Need to raise enough capital to

WEAKNESSES
STRENGTHS
Fintech industry with a wide acquire the planned customer base

customer base • Reimbursement of the given

• User-friendly interface credit to be done within a given

making the product convenient timeframe to avoid frauds

• Getting a significant number of

to access
retail stores onboard to accept
• In-depth industry experience
payments through CreditKart
and knowledge about the

market
OPPORTUNITIES

• Similar service can be soon

launched by competitors which

• Leveraging the existing

THREATS
might hamper the consumer
customer base and merchant
base
network to launch the service
• Declaration of discounts and
• First company to launch such a
benefits on credit card usage
product in Financial services
might create a negative impact
industry
on CreditKart

COMPETITION

Although there are a few companies like Amazon pay that provide credit services to the consumers for online

purchase, PhonePe is the only brand in the Fintech Industry that is truly designed for providing credit services for

retail shopping across the country.

PRODUCT OFFERING

PhonePe now offers CreditKart, a new service that has been developed to satisfy consumer needs by providing credit

service for any retail purchase. The consumer can buy a product of his choice from a retail store by using a credit

through PhonePe. The consumer will have to pay this amount within a stipulated time frame so that he can avail the

service at 0% EMI (T&C*).

MARKETING STRATEGY
Key to marketing strategy is focussing on innovation, technologies, and enabling consumers with financial easement

even when visiting offline stores. CreditKart aims to bring a sense of financial freedom to Indians who are unable to

avail personal credit services. With a wide range of credit limit options and 0% EMI, CreditKart looks forward to

changing the way consumers feel about offline retail merchants, who otherwise are not able to compete with online

shopping experiences.

As Sameer Nigam, Co-founder and CEO of PhonePe, puts it, “...The purpose is to offer every Indian an equal

opportunity by giving them access to financial services.”

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 MISSION
CreditKart’s short-term mission is to provide customers with the ease of buying and paying from retail shops. The

purpose of the service is to make the offline retail outlets more accessible in terms of payment especially when it

comes to shopping during cash crunch. The long-term mission of CreditKart is to empower every earning member

of the Indian society to be able to enhance their lifestyle thereby improving their standards of living through retail

borrowing.

Mission statement: CreditKart—enriching your retail experience.

MARKETING OBJECTIVES
Financial: Although the Indian ecommerce scene is changing rapidly, it still accounts for only 3% of the

Indian retail market. This is because Indian consumers still believe in “feeling and seeing” the product before

investing. Therefore, the brick and mortar retailers are here for the long haul and CreditKart is here to make

them even more accessible while one focuses on satisfying their needs. Tapping into this would lead to more

conversions and less churn rate for the parent company, PhonePe, if any.

TARGET MARKETS
India has a population of ~130 cr of which ~20%, ie, 25 cr, belong to the upper class of the social

demographic. In the remaining 105 cr, CreditKart’s target market would be 52 cr of the population that

includes people from the middle class strata who are shopping enthusiasts and frequent buyers.

POSITIONING
“For young working professionals, middle class families and shopping enthusiasts who need credit on the go,

CreditKart is an instant credit app for offline purchases.”

Established in 2015, PhonePe is one of the top four in the payments space. Leveraging their platform for

launching this new deferral payment app, would help in reaching the masses sooner and will help in instant

brand recognition and brand recall.

MARKETING TACTICS
CreditKart plans to launch a new campaign "Shopping jaha, CreditKart hai vaha", to highlight the convenience that

creditKart will be offering to its consumer base. The company will run digital campaigns with the help of social

media influencers and youtubers, to showcase the ease with which digital lending can be made a part of retail

shopping. Short training workshops will be conducted to educate merchants in rural areas about the usage of

CreditKart and its benefits. Bollywood actors Amir Khan and Alia Bhat will star in the TV commercials which will

help in creating an awareness among the youth.

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 COMMUNICATIONS
The message conveyed by the company will be that it provides the credit facility at a very low rate as compared to

the competitors. Also the website and application are not complicated and easy-to-use for the customers of different

age groups. The website will contain various offers available on a day to day basis which the customers can avail

and special offers on month end for the salaried customers to make it easy for them to buy essential goods like

groceries etc. Second Marketing campaign used by the company is the collaboration with one of the most watched

series ‘F.R.I.E.N.D.S’ ,to help people with month-end salary crunch who want to spend time with their friends and

struggle in getting a personal loan for their trip they had planned with friends.

PRICING
.
The pricing will be based on a variable pricing model. Prices will be considered after completion of the threshold

limit i.e 30 days from the date of giving loan.

PRODUCT
The service is specially designed to provide credit to consumers who shop offline. Currently companies are only

into providing online credit services. Our product will be first of its kind to help people with their offline shopping.

As of now, the company has a user-base of over 23 crore, with active users of around 9 crore. The large consumer

base will help the other consumers to trust upon the services.

DISTRIBUTION
CreditKart will provide its services through its website(www.Phonepe.com) and the application .It captures the

true essence of smooth shopping experience combined with alternate credit that’s just a click away. Through this,it

will be more convenient and easy for the customers

MARKETING RESEARCH

PhonePe being well established, is blessed with a strong consumer base and network throughout the country. The

company will be able to leverage this opportunity by creating more awareness in the minds of already existing

consumers. A survey was conducted which reflected that most of the users are interested in availing credit services

in retail shops. After launch of the product one more primary research will be conducted to know about the design

improvements. This will help the company in achieving 100% customer satisfaction.

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 FINANCIALS
PhonePe through CreditKart will provide credit to consumers based on their credit score.

FOLLOWING ARE THE SLABS FOR THE SAME:

MARKETING EXPENSE BUDGET PER YEAR FOR CREDITKART:

TOTAL EXPENSE AND BREAK-EVEN ANALYSIS:

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 FOR THE YEAR 2020,

Average credit available per person per month = 20,000

Interest rate after a month = 2% per month SI

Average revenue per person per month = 400

Total expense = 26,500,000

Breakeven units = 26,500,000/400 = 66,250 customers/month

Assuming that 20% of the customers will pay before the interest is charged,

Total customers per month = 80,000

CONTROLS
The following points will be monitored to gauge the performance:

Revenue – Monthly and Annual

Expenses – Monthly and Annual

Credit given

Customer Satisfaction

Reimbursement of credit

IMPLEMENTATION:

PhonePe will conduct a marketing campaign every three months

It will give out exciting offers during festive seasons

An efficient use of printed media will be made by floating two advertisements every month

A marketing competition will be held every six months for management students on platforms such as D2C

Initially, the spending on advertising will be low but as the product move ahead in the Lifecycle, the

spending will be increased.

CONTINGENCY PLAN

DIFFICULTIES AND RISKS

Launching a new product in the market that is full of Fintech competitors

Establishing consumer awareness of the newly launched product

WORST-CASE SCENARIO
Unable to offer credit due to lack of capital generation

Determining that the business cannot sustain based on ongoing basis

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DIGITAL LENDING FOR RETAIL SHOPPING

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THE SEGMENTATION, TARGETING AND POSITIONING STRATEGY
FOR THE NEW LINE OF PRODUCT PROPOSED TO BE INTRODUCED

SEGMENTATION

TARGETING
Targeting evaluates the potential commercial attractiveness of each segment. The list below refers to what is

needed to evaluate the potential and commercial attractiveness of each segment. Targeting is the process of

identifying the most attractive segments from the segmentation stage, usually the ones most profitable for the

business.

Working professionals- The working professionals primarily in the age 21 to 50 can be a target segment as

they on the earning trajectory and are also left with little amount in hand, at the end of month.

Middle class families-The families which work on hand to mouth can be the other target of CreditKart as they

prefer buying groceries throughout the month and paying collectively at the end. Due to the convenient credit

facility of CreditKart, this may be a good option for them.

Shopping enthusiast-This segment of people are shopaholics and spend huge amount of money and need such

sort of credit facilities for their retail shopping.

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 POSITIONING
BRAND MANTRA: QUICK CREDIT FOR RETAIL SHOPPING
PhonePe has come up with a new service that will make shopping easier for the offline shopping enthusiasts.

Combining the service of providing small credit via digital platform with the traditional way of Indian

shopping is the motive of PhonePe. Indian consumers can shop till they wish to and can pay for it at the end of

month without bearing any interest cost.

POSITIONING STATEMENT
For bachelors and working professionals, CreditKart is a credit service that provides quick credit in such a way

that it can be used for retail shopping.

POINTS OF DIFFERENCE
India ranks significantly lower than other economies in terms of credit penetration. This is because

traditionally Indian banks’ underwriting processes require rigorous documentation, such as income

proof and credit bureau records, from potential borrowers. With increasing internet penetration and credit

bureau coverage, financial institutions (FIs) and FinTechs find it easier to appraise customers digitally before

giving credit. PhonePe has taken an advantage of this facility and has come up with a credit service that no

other competitor has yet thought of. Multiple Fintech companies provide credit facilities to consumers for

online shopping. CreditKart will be the first offering from PhonePe to help consumers avail short term credits

in fraction of seconds for their retail shopping needs. PhonePe will have a bigger advantage to launch

CreditKart and make it successful because of well established network as a digital payments company.

POINTS OF PARITY
Providing credit services as a product offering has been a trend adopted by many Fintech companies.

Consumers find this service a necessity when it some to digital payments. Apart from this, PhonePe also

ensures highest level of security for every transaction. The app is designed in such a way that consumers find

the interface extremely user-friendly. The design of the newly launched product is similar to other payment

apps that are already available to the users. The service is convenient to use through a set of tools provided on

the app.

COMMUNICATING POP’S AND POD’S:

To communication this brand position PhonePe will launch ‘credit Lo Retail Shopping Karo’ using print, online

and television marketing. Bollywood actors Amir Khan and Alia Bhat will be the brand ambassadors for the

same. This will create a buzz in the market and thus increase the consumer reach within a short span of time.

THANKYOU FOR USING PHONEPAY CREDITKART

PHONEPE CREDITKART PAGE 11