Walmart-backed PhonePe launches Pincode app in e-commerce push
PhonePe, India's leading UPI payment app, is making an e-commerce push. The Walmart-backed company has launched a hyperlocal, consumer-facing app dubbed Pincode. The app is powered by Open Network for Digital Commerce (ONDC), an initiative by the government of India to democratize the e-commerce landscape. PhonePe recently separated from Flipkart, making it easier for the company to chart its own path.
Why does this story matter?
India's e-commerce space is estimated to be worth $133 billion by 2025. It is currently dominated by Amazon and Flipkart. PhonePe's foray into the space, with the kinds of backing it has, is expected to improve the competition. A good consumer-facing application can force incumbents to lower their fees. Having PhonePe on the platform will give a boost to ONDC too.
The app offers 6 categories of products
Pincode is a buyer app. It focuses on hyperlocal commerce by working with local sellers. The app offers buyers options in six categories, including grocery, food, pharmaceuticals, electronics, home decor, and fashion. Initially, it will be only available in Bengaluru. PhonePe plans to extend the app's reach to different cities. People can have multiple carts at the same time in Pincode.
Pincode is the UPI moment for e-commerce: PhonePe CEO
Speaking about Pincode, Sameer Nigam, co-founder and CEO of PhonePe, said, "This is the UPI moment for e-commerce." "Pincode is a brand-new shopping app and offers a revolutionary new approach to e-commerce, which puts all the local stores and sellers at the heart of the digital shopping growth story," he added. It will create "new opportunities for growth and driving innovation at scale."
ONDC was launched to disrupt the duopoly in e-commerce
ONDC is a private non-profit company set up by the Department for Promotion of Industry and Internal Trade (DPIIT) in 2021. It is an interoperable network that allows sellers to display their products and services across all participating apps and platforms. It was launched to disrupt the reliance on proprietary services run by e-commerce giants Amazon and Flipkart.
Pincode pits PhonePe against Paytm in ONDC
PhonePe does not see Pincode as a one-time investment venture. According to the company, it will "invest significant effort" in Pincode. Pincode puts PhonePe in direct competition with its rival Paytm. Paytm, too, has an ONDC platform integrated with its app.
