Why PayZippy is a distraction for Flipkart

has finally announced its payment gateway, PayZippy which will launch soon. Like any other Flipkart service, this is definitely well thought through and we believe is a game changer.payzippy-logo

However, PayZippy, to me, could become a distraction to Flipkart. First, let me share why I am actually looking forward to the launch of PayZippy:

1. The industry needs a seller perspective.

Flipkart knows the challenges associated with selling online – right from performance of several payment gateways to several use-cases that are of utmost importance to sellers (and is often ignored by the current vendors).

One certainly hopes that the company is trying to solve all of the pain-points that they have faced building the company.

And mind you, Flipkart’s pain-points are almost a superset of what the average joe is facing.

2. More Developer Friendly APIs

We certainly hope that APIs will be more developer friendly and given Flipkart’s engineering focus, one is bound to believe that the company will attract more developers to build on top of the APIs. This opens up the ecosystem.

3. A Great Marketplace

To be a great marketplace, Flipkart will need to build, own and run all the pieces of a marketplace as best of breed and make money off all of them.

Maybe, Flipkart is starting off with Payments; I assume it will offer logistics, SCM and storefront later?

That is, a full 360 degree service to the ecommerce industry that translates to ‘own the space and transactions, even if these transactions aren’t happening on Flipkart’.

BUT THEN.

Amazon has entered the Indian market and while they are adding categories at a fast pace, here is an observation I have noticed over the last couple of days.

My social media timeline is full of Amazon shipping experience and has less of Flipkart now. Not that I am saying this translates to actual data/behavior, but given that I follow a lot of early adopters/opinion makers, something is changing.

And that change isn’t a great news for Flipkart.

Importantly, Flipkart Wants to Think BIG. Is Ambitious.

Flipkart thinks BIG. Is Ambitious (do check out the video of my talk with Sachin Bansal @UnPluggd,embedded towards the end of this article).

I am assuming that there is at least $5mn revenue projection in the first two years for PayZippy.

Now, this involves significant marketing outreach – especially B2B and while I am not questioning Flipkart’s ability to do the same, I am questioning the distraction that PayZippy will bring to the company.

Right from creating a new organization structure in the company to finding new marketing/sales mantra, PayZippy is almost like a startup within the company. Just that this startup will be extremely ambitious and like Flyte, would be subjected to ‘extreme conditions’ for survival test.

Ofcourse, assuming that PayZippy is a 10 year business plan for Flipkart, all of this makes a lot more sense – but launch at a time when your biggest competition is knocking (not just at the door) and one’s core capability (logistics et al) is being commoditized seems to be a distraction.

What Business is Flipkart Into?

Easing Ecommerce, as Sachin mentioned at UnPluggd.

The current focus for the company is MORE transactions (the recently launched notification feature is an example) and while the company is under severe competition from Amazon, opening up new battles is a distraction.

If you know the enemy and know yourself you need not fear the results of a hundred battles.[Sun Tzu ]

TL;DR : ‘Because You Can isn’t the most optimum approach to launching a new product. In case of PayZippy, the truth is that Flipkart CAN. But that doesn’t mean that Flipkart should.

Flipkart understands the pain point, is aware of the issues merchants face and their technical capability matches well enough to make PayZippy a big business

But does the company NEED to do this?

Maybe not in the current context of the ecommerce industry, where Flipkart needs to pull up its (socks + whatever) and will probably face the toughest battle, since the launch – i.e. Amazon’s entry.

What about you? As a merchant, you surely need PayZippy (makes the entire space more competitive), but as Flipkart – do you?

 

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