Business model and case study of Paytm and Oyo rooms 




Today we'll talk about Business model of Paytm Everybody knows about Paytm, you may have done recharge from there or online order or bill payment. So how do they do earn? We'll discuss this today First of all let's talk about it's history that Paytm is a brand Which is a part of one 97 communication Started in 2010They started You can add money in wallet. and recharge your phone And gave a lot of cashback in the beginning 100 cashback on recharge of 500 These cashbacks were a way of making paytm a habit  today what  happens, that  normally  when ever we  do recharge we used to get a coupon  Then with time, we gave our number to service providers for recharge But today, most of the people Who know how to use internet We prefer paytm and we can get 5% cashback 10rs, 20rs cashback And we prefer paytm because of their service and cashback And today they are earning on the behalf of cashbacks they have given in the initial phase If we divide their business model It's a combination of 7 Business model. First Business model is market place. What does it mean?  Their model is a commission based When a seller list a product on their website when a particular product is sold, they get a commission that's it There are some hidden cost inside it too Suppose there's a product worth 100rs on paytm So the product sold is of 100rs and on this product Seller have to give 2.8% transition tax of the amount paid by the consumer to the paytm Logistics charges are on paytm and commission Basically paytm earns via 3 medium and if they try to do some fraudulence Then paytm charges big penalty on them then they'll pay for the penalty as well. According to paytm, They have daily sale of 20 lakh products They get transaction fees, commission and most important thing, 90% of payment is Prepaid means from the wallet. So Whenever a order is prepaid, chances of return request are low Normally if mode of payment is cash on delivery then chances of cancelling the order are high SO the transportation cost is the loss So here majority is prepaid So chances of cancellation are high their next business is of rechargeThey can directly pay from paytm So from here Inventory cost is cut and commission is there So they do give cashbacks because they want to make you habitual A time will come when You'll get used to paytm and their next business model They are tied up with MTNL BSNL and with power supply with airtel with broadband Same game whenever a person recharges from a particular service provider There, they get a commission They first give customer some refund If you pay from paytm, you get 50% off If a person once paid the electricity bill via paytm. Chances are high, you'll pay the bill from then only Now what people do If they have 10 sim They first get discounts from those 10 sims And change from one wallet to another wallet. You can do this But normally People are getting positive towards paytm next business is of Payment gateway Mean if i am runnig my website Suppose i am selling my nutrition supplements and i want to add a payment gateway So that you can pay via card SO they provide this solution called payment gateway and they get some commission Now their architecture cost All the cost in the making of payment gateway It's a one time cost After this More the payment,, more the commission So there are many companies Who are earning only by providing payment gateway Paytm has only one subsdiary( means their payment gateway is handled by some other company) Next is Digital wallet that you can send/receive money in wallet Okay Suppose i added 10k but those 10k When i will add them in my account I have to give some commission They'll earn from this too We do not understand this. But they do earn from this mode Now the new thing Gold currency that you can buy gold in 10rs 20rs gold Everyone know about this business Your money will be used If prices of gold increase, you'll get the increase and they'll cut their commission and if prices of gold declines, still they take commission So basically They are earning a alot just via commission So you tell me whether this business model is profitable or not or you have any suggestions Okay friends, article ends here I hope you understand it If any doubts, do ask me in the comments Like and share and do tell me in the comments below whether this business model is profitable or not




 Next we are going to talk about OYO Rooms. Like i've told you that I love the business model of OYO rooms. I know this time it's in loss But in long term, they are going to in profit. Because basic need of A business is fulfilled by them Let me tell you a story of a person Hitesh Aggarwal, he was travelling in whole india He saw that he was unable to find rooms with affordable price Low price rooms were not good Differences in facilities were there He thought of starting a business With an investment of 1 lakh He invested 1 lakh He has created an empire of 2900 crore. And this company started in 2013. How this business grow so fast? They do receive the investments Investments no doubt helps the business. But you should have a business model. They did one more thing right If you can not fight with your competition then acquire it There was this company called Zo rooms. And they were doing the same business, They bought it Now they are only company in india That's how they get investment easily Now they are not in that loss as compared to flipkart Limited loss And this loss is decreasing day by day. They have more than 70k+ rooms And tied up with more than 8500 hotels. in more than 230+ cities. This is the recent data One more thing: Early check in They were the first company to do this Basically it was an advantage in early check in Those who don't know about early check in It means If check in timing is 11am then i am allowed to come after 11 only. If i come before 11 then i have to pay for it But according to their rules, if we book early Then you will come before a specific timing Then you can Condition applied: That room should be free It is not possible if a person is already in that room. They'll try to give you the room Let's talk about their business model. Like They acquire hotel rooms. Acquire means You have a hotel, they'll ask for a room then they'll decorate them room accordingly They'll pay the hotels monthly wise. Let's say your room cost is 2000 And oyo team will decorate it accordingly And then hotel can set a price monthlywise. Because of discount, they give them in 800-900 For calculation let's say 1000 What happened now If they book only for 15 days They can reach no profit no loss After reaching the 16th day, their profit margin starts. The investment they did in decoration That's a one time cost Second is Their team tries to negotiate They basically ask hotels to pay for the decoration and stuff and offer profit margin Commission Commission roomwise And commission can be any amount. Now this commission can vary from 10% to 80% According to my sources. I can not tell his name You can see this news that the acquire zo rooms. This is the list of their investors. All the details of funding. In short , their business model is profitable Their loss margin is decreasing day by day. This is a good business model. Now you tell me in the comments below Whether this business according to you is good or not If you'll check OYO rooms is for innovation They always try to bring something new. IF you want to survive in your business journey Then innovation is important. Best thing is 20year guy build this company. Now he is just 23-24. Means a guy younger than us is a millionaire. 3000crore worth business. Okay friends, article ends here. I hope you liked it If any doubts, do ask me in the comment section. Like share and do tell me What should be our next business model. I don't keep target of likes but you can like.


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