Paytm slashed marketing and promotional expenses by 62% in FY21 to Rs 532 crore
Consolidated revenue from operations dropped 15% to Rs 2,802.41 crore from Rs 3,280.84 crore
One 97 Communications, the parent company of digital payment app Paytm, has cut down its marketing and promotional expenses significantly in the fiscal year 2020-21. Paytm is the title sponsor of BCCI international and domestic matches, besides being the umpire partner of the Indian Premier League (IPL).
According to financial data accessed by business intelligence platform Tofler, the company's consolidated marketing and promotional expenses shrank 62% to Rs 532.52 crore from Rs 1,397.05 crore in the previous fiscal.
On a standalone basis, the marketing and promotional expenses declined 62% to Rs 520.95 crore from Rs 1,365.57 crore a year ago.
According to a recent report by Bernstein analysts Gautam Chhugani and Manas Agrawal, Paytm had cut its marketing spends more than the competition. Paytm, the analysts said, has streamlined marketing spend from 1.2x revenue in FY17, to 0.4x in FY20, and now at 0.2x of revenue in FY21.
“Within the UPI (unified payments interface) super-apps, PhonePe leads the pack on overall UPI market share and has grown market share relative to Google Pay and Paytm. Phone Pe and Google Pay continue investing in providing customer incentives and spend on marketing at 2.5-3.0x revenue (FY20 MCA filings). Paytm has streamlined marketing spend from 1.2x revenue in FY17, to 0.4x in FY20, and now at 0.2x of revenue (FY21), while growing merchant payments share across wallets, UPI, PoS, and online payments,” the analysts said in the report.
Consolidated revenue from operations dropped 15% to Rs 2,802.41 crore from Rs 3,280.84 crore. On a standalone basis, the operational revenue fell 14% to Rs 2,667.08 crore from Rs 3,115.10 crore. Total consolidated expenses declined 22% to Rs 4,782.95 crore compared to Rs 6,138.23 crore. Standalone expenses dropped 21% to Rs 4,536.94 crore from Rs 5,773.46 crore.
The company's consolidated net loss decreased by 42% to Rs 1,701.01 crore from Rs 2,942.36 crore. On a standalone basis, the net loss reduced 45% to Rs 1,560.20 crore from Rs 2,833.18 crore.
One 97 Communications is in the business of providing payment and financial services which primarily includes payment facilitator services, facilitation of consumer and merchant lending to consumers and merchants, wealth management etc.
It also provides commerce and cloud services which primarily consists of aggregator for digital products, ticketing business, providing voice and messaging platforms to the telecom operators and enterprise customers and other businesses, etc.
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