As tech companies are actively pursuing the industry, device manufacturers have also set their eye on a pie of this industry. Recently, in a partnership with MobiKwik Wallet, Xiaomi announced ‘one-touch-recharge’ facility to its users. The feature will be available on the Xiaomi devices running on MIUI 8, and would be extended to the new as well as the existing Xiaomi user base in India.
The feature would allow its users to make ‘one touch recharge’ for their DTH or telecom operators. What’s enchanting? The user will be prompted for bill payments as well as low balance via service SMS from their DTH or Telecom operators. The SMS would be incorporated with a ‘Recharge Now’ button to facilitate instant recharge.
Mrinal Sharma, CEO of MobiKwik appeared quite enthralled by the partnership and said that the partnership will facilitate seamless payments in the future.
Mobile Wallet is the future
The online payment industry is growing at a steady rate. Major players including Apple with Apple Pay, Alibaba with AliPay, Google with Android Play and Samsung with Samsung Pay are set to capture a lion’s share of the booming digital payment industry. The seamless payment facility has a glittering future ahead of the global mobile payment market, which is expected to touch $620 billion mark by 2016 and may reach to estimated $1 trillion by 2019.
Dominated by Paytm and Freecharge, Indian wallet industry is also growing parallel to the global trend. The growth of mobile wallet industry is primarily driven by PayTm mentored by Jack Ma, founder of Alibaba. By realising the enormous potential of the digital payment system in India, major businesses houses were opted Payment Bank’s license from RBI in 2015. Recently, Reliance also jumped in the digital currency segment with the launch of its Reliance Jio Wallet. Considering these facts partnering with Xiaomi may prove to be a wise move by MobiKwik to survive the intense competition in Indian wallet industry.
MobiKwik And Mobile Wallet in India: A $1.2 billion Industry
First and foremost, the smartphone penetration in India is still bleak as only 17% of the India population owns a smartphone. However, Gartner, the industry research firm, has estimated that smartphone shipments in India may record an encouraging 29% yearly growth in 2016.
Besides, the increasing LTE penetration and availability of state-of-the-art budget smartphones in India has made the prospects more enthralling for the Wallet industry.
Indian wallet market looks promising, and the industry is estimated to record a whopping 68% CAGR between 2011, when the industry was valued at $86 million, and 2016. The wallet market in India is estimated worth $1.15 billion in 2016. The popularity factor of wallet industry in India is enchanting, 58% of the smartphone users in small towns in India are using wallet service compared to 60% in bigger towns.
On the flip side, the engagement on the wallet apps in India has been considerably declining for the last couple of months. The prime reason is the absence of mouth-watering discounts and cash-back offers initially offered by wallet companies to hook the customers.
Therefore, MobiKwik has to increase its wallet market share as fast as possible by riding on the back of Xiaomi. Almost two-third of mobile wallet market in India is captured by two companies, Paytm with 39% followed by Freecharge with 26%, while MobiKwik controls only 17% of the market.
Xiaomi Also Needs MobiKwik
Xiaomi is currently struggling with its smartphone sales in India. From pop parties to product launch, Xiaomi is leaving no stone unturned in India to pull in its potential customers. Its global smartphone market presence is also shading off as, in Q1 2016, the company recorded a 9% YoY decline in its smartphone shipments. The company is struggling in India as well due to the intense competition from other Chinese smartphone manufacturers in India who recently debuted in India.
However, Xiaomi is trying to strengthen its global market presence by venturing into mobile services and technology innovation space. The company has, reportedly, bought 1500 patents from Microsoft recently and is also working on many more innovative ideas, likes of home appliances, air purifiers and animated movies.
Thus, deciphering the numbers one can understand that both Xiaomi and MobiKwik are struggling to expand their customer base and it would be interesting to see that what this partnership will bring to Indian wallet Industry. Eventually, at this stage, it looks like a win-win situation for both.