Kavin Bharti Mittal-founded instant messaging app Hike Pvt. Ltd is planning to expand its digital wallet offerings by adding services such as cab, bus and train booking, movie tickets and bill payments to accelerate growth.
“Our users want more services. So we’re heads down working hard to bring things like booking taxis, movie tickets and more to the platform. Expect these to start rolling out as early as next quarter,” Mittal said on Thursday.
The company launched its wallet in June and claims it recorded 10 million transactions in November. It also says that it now has 25 million wallet users, a fourth of its total user base.
Analysts are divided over Hike wallet’s performance thus far.
Hanish Bhatia, senior analyst at Counterpoint Research, said Hike's growth story in the wallet segment is far from impressive when compared to bigger players such as Paytm and Mobikwik.
However, Faisal Kawoosa, lead analyst at Cybermedia Research's telecom practice, said that 10 million monthly transactions for Hike is “a good number as wallet is not its core offering.”
Hike wallet's transaction volume also pales in comparison to Google's Tez payments app, although the two are not directly comparable. In the first week of December, Google had said that its Tez payments platform had acquired 12 million active users in just 10 weeks since its launch in India without even enabling bill payments.
Caesar Sengupta, vice president of product management at Google, had said that the app processed 140 million transactions since its launch in September. “Tez contributed to 53% of all UPI transactions in October and 73% in November,” he had said, referring to the unified payment interface.
In contrast, Hike recorded 1 million UPI-based transactions in November.
Mobikwik and Paytm have a big lead over Hike in terms of monthly active users. While Mobikwik has 60 million active users, industry estimates indicate Paytm has 147 million active users. Tez, Paytm and Mobikwik all offer bill pay services including insurance, broadband, electricity, water, gas, mobile and metro rail services payments.
To add to competition, Facebook-owned instant messaging platform WhatsApp has also been looking to launch a payments service in the country to allow ticket bookings, peer-to-peer transactions and other facilities.
WhatsApp has 200 million active users in India and one billion globally. Facebook, which has more than 155 million active users in India, also has been working with PayPal to integrate payments into its messenger app.
According to Bhatia, Hike's immediate strategy should be to nudge all the 100 million customers use its wallet. “Existing users can be tempted to spend on the app via discounts or offers,” he said, adding that Hike had a lot more room to incorporate more merchants into the wallet.
While Hike has revealed plans to ramp up its wallet business, it hasn’t announced any monetization strategy. For the financial year 2016-17, Hike had no operating revenue; it had clocked its first-ever operating revenue of Rs 42.32 lakh in the previous year.
Hike, incorporated in 2011 and launched in December 2012, has raised $261 million in funding. In August 2016, it raised its fourth round of funding of $175 million led by China’s Tencent and Taiwan’s Foxconn at a valuation of $1.4 billion in August 2016. Other investors in Hike include Tiger Global, Softbank and Bharti Group.
*This article has been modified to correct certain inaccuracies.