Product adoption life-cycle for Mobile wallets in India
Product Adoption Lifecycle of Mobile wallets in India
Mobile wallets, a concept which is still not clear to every Indian consumer who transacts online. There are many reasons behind the less adoption of cashless economy. Though when Google launched Google Wallet back in 2011, it was a clear chicken and egg situation, which all the Fintech companies had to break in order to set the road for user adopting the wallets for their day to day transactions over cash. The challenge was not only on one side but on the payment receiver side also. Unless someone is ready to accept the payment via wallet, no one can pay.
Over a period of time, companies like PayTM, MobiQuick, PhonePay etc. Have invested a lot in clearing the hiccups or especially chicken and egg situation in the market and increase the adoption rate of the Mobile Wallet in the Indian Market. Though the market is still not mature rather at a growing stage, we shall talk about how it started and what stage it is at now.
Where Mobile wallet Adoption In India
Let’s first understand where we stand in terms of the Mobile wallet adoption stage in India. In my view, the industry is at the “Early Majority”. The CHASM has been taken care well enough by the industry players and have created a mature product to be adopted by the major consumer base. It’s a very good stage for any established player to build a great user base and get higher returns on the investment they have made. Though this growth shall attract many new players in the game and might give a tough competition to the existing players.
Now let’s understand more about the different stages of the product Adoption lifecycle and how at different stages Indian mobile wallet companies attracted the consumer and make them adopt the product
Innovators — In any industry, they are the sought after people not just by the companies but by the followers (future customers of the brand) also. They are high-risk takers in terms of trying out new products. Many times these kind of users are great influencers and help any product / Brand reach the masses. These users are also a great source of feedback to the companies. Though the number of users fall under this category is very less i.e. 2.5%, but the impact they have on the future success of the product is very high. Their usage, adoption, and opinion matters.
Early Adopters — These types of users follow the Innovators and adapt the product as soon as it’s out in the market. Along with Innovators, they make an important set of the user for any product to focus in the initial stage of the Product adoption life cycle.
Early majority — They are the one who are the next major set of users in the product adoption lifecycle and helps any product to reach its peak. They are approx. 34% of an overall user base of users. These sets of users adopt the product once they believe in it. Unless they see right examples of usage by other users and are convinced with their pre usage dissonance, they don’t adopt any product. More often they need a high amount of offers to be attracted towards the product usage.
Late Majority — Though this set of the user also comprise of almost the same amount of users as Early adopters i.e. 34%, but they are little different from the early adopters. This set of users need more examples of product delivering the worth of its price and value proposition. Once they are fully satisfied that the product has no issues and is being very well tested in the market, only then they start adopting it.
Laggards — This set of users falls under the last type of users in any product adoption life cycle. The set is as good as 16% of the total user base and needs a high validation of product before they accept it. This set of users are generally not risk takers and do not change their habits easily. Sometime they need a high amount of influencing power, especially from their peers to adopt the product.
Challenges and what made the revolution in Mobile Wallet
When Google Wallet was launched back in 2011, it was a classic challenge of economics — Demand Vs Supply. There were no demand and supply. The adoption for innovators was not easy as there were no merchants who would accept the payment via a mobile wallet. Other challenges were the slow internet connection, less security, less adoption and confidence in the online transaction etc. Soon many other players entered the ring and started competing to gain the maximum adoption in the market. The introduction of 4G and higher smartphones penetration was a supporting factor.
It was Nov 8th 2016, when the announcement of the discontinuation of INR 500 and INR currency by Indian Prime Minister, Narender Modi, whole country faced a situation of cash drying out of the economy. This was the golden moment for mobile wallet players to solve the problem and showcase a strong use case to the wider audience. PayTM responded very strongly to the move and gained maximum market share.
Mobile Wallets Vs Other payment methods in India
Well, Mobile wallets have many players to compete with. They compete not just with cash but with Cards and Newly launched UPI method of payment by Indian Govt.
In the urban market, the cashless economy has started to pick up. The strategy followed by PayTM post demonetization of bringing all possible small vendors into the ecosystem helped this industry grow many fold and increased the use of Mobile wallets by consumers. The petty cash transaction at the street vendors level has been replaced by the Mobile wallets. It’s a positive sign as more number of non-tech savvy users are adopting the Mobile wallet way. Parking lots, Toll plaza, Movie halls, Metro tickets and many more such places where cash transactions were more and cards were very less, Mobile wallet has taken a major share.
And the trend has not been limited to small transactions. Mobile wallets have made their remarkable presence in large ticket items also. This is primarily through major tie-ups done by the Mobile wallet players with many brands. More cash backs and discounts/offers is the way Mobile wallet companies have been giving tough competition to the card payment method. Though the credit cards are still having the last laugh because Mobile wallets are to be recharged first and then used for payments. The way mobile wallet companies are aggressively working towards acquiring a major market share, Soon we shall see some solutions around the same as well.
Growth Hacks used by the Mobile wallet companies in India
Growth hacks have become a common part of any Growth strategy and marketing strategy. Mobile wallet product companies are not lagging behind. In fact, these companies used an enormous amount of growth hacks in order to change the habit of consumers. Some of the growth hacks are widely used by such companies are — Cashback and Discounts/offers. Partnership with major players/brands such as Metro rail, Utility bills, Payments for basic needs/daily needs such as petrol pumps, vegetable vendors etc. Also played a major role in quick adoption and higher retention of the mobile wallet companies.
Summary
Overall, the mobile wallet product adoption is on growth in India and companies can see a major growth in the coming years. Though such success has already started attracting more players in the game and technological advancement is also paying a major growth of the industry. Govt. is also keen on making a cashless economy and policies introduced recently are helping the mobile wallet adoption rate in India. Not to my surprise, soon people would start gifting money through Mobile wallets — LOL.
