India’s digital subscription economy is set to receive a major boost with the launch of a new UPI-based auto-pay feature for recurring payments.
Smaller venture capital firms are clocking good returns from some of their portfolio companies at a time when the broader industry has sharply trimmed investments amid Covid-19 pandemic.
The National Payments Corporation of India (NPCI) has launched the much-awaited auto-pay feature on its popular Unified Payments Interface (UPI) platform, allowing users to make recurring transactions of up to Rs 2,000.
Users will be able to set up a one-time instruction on their UPI application to pay their monthly bills, video streaming subscriptions, and make SIP investments. For transactions above Rs 2,000, UPI pin will continue to be mandatory.
This move has been in the works for quite some time, with the Reserve Bank of India (RBI) giving a go-ahead for recurring UPI transactions of up to Rs 2,000 in January this year.
Digital payments boom
The rollout comes at a time when digital payments are gaining traction among customers especially for small-ticket purchases and bill payments due to the Covid-19 pandemic and UPI is increasingly becoming the payment mode of choice for consumers.
UPI reported a record 1.34 billion transactions worth Rs 2.61 lakh crore in June, surpassing its previous record in February when 1.32 billion transactions worth Rs 2.22 lakh crore were processed.
Infosys co-founder Nandan Nilekani said this feature will play a “huge role in enabling a billion transactions a day on UPI channel”. Read more.
Snapchat’s India growth
Snapchat’s daily active user base in India more than doubled on a yearly basis during the quarter ended June 2020, chief executive Evan Spiegel told analysts on Wednesday.
Spiegel attributed this growth to the company’s investment in localisation and improved performance of its mobile app, especially the Android one.
What has it done in India so far?
Snapchat launched a re-engineered Android app designed for India and other emerging markets in April last year and added support for nine Indian languages. The app also offers a localised version of its content discovery platform Discover to its users in India.
For creators, Snap is undertaking various initiatives including workshops to help them build culturally relevant experiences for the India market with new technologies like Augmented Reality.
Key numbers
- Snapchat added 9 million daily active users during the quarter, taking the total base to 238 million users.
- Geography breakdown: 90 million users in North America, 71 million users in Europe and 77 million users in the rest of the world
- Users opened the app over 30 times on a daily basis in Q2 2020
- Revenue rose 17% year-on-year to $454 million
- Net loss widened to $326 million for the quarter, from $255 million during the same period last year
- The average revenue per user was flat at $1.91 in the quarter ended June. Read more.
Smaller VCs clock good returns
Smaller venture capital firms like WaterBridge Ventures, Omidyar Network, and Whiteboard Capital are set to either clock profitable cash exits or have witnessed significant up-rounds, or upticks in valuations, across some of their portfolio companies
Why is this significant?
Quite a few of these firms are outside the blue-chip venture capital world comprising the likes of Sequoia Capital and Accel Partners and have typically raised less than $50 million in their first funds.
These exits are significant since smaller VCs were always in competition with the larger firms to source deals and have found it hard to get the right ownership to make outsized returns.
This development also comes at a time when the broader venture capital industry has sharply trimmed investments amid economic crisis induced by the Covid-19 pandemic. Read more.
Festive start for consumer electronics firms
In a bid to capitalise on sustained pent-up demand, leading smartphone and consumer electronic goods manufacturers such as LG, Sony, Xiaomi, Vivo, Realme, and Panasonic are advancing their festive season production plans by a month and increasing their production from last year’s levels.
This move will also help companies build up inventory, to tackle the issue of localised lockdowns that are affecting plant operations.
Recouping losses
While the industry lost 21-22% of overall revenue during the lockdown months, the rise in demand in the following months indicates that some of this can be recovered in the festive season, said Panasonic India chief executive Manish Sharma.
While demand outstripped supply for categories such as smartphones and dishwashers, even products like refrigerators, televisions, and washing machines have seen sales rising 40-60% since May. Read more.
Spotify-Universal deal
Audio streaming service Spotify has struck a new multi-year global licensing deal with the world’s largest music label Universal Music Group.
The deal comes close on the heels of the music streaming service foraying into Russia and 12 other European countries last week. Spotify is now present in 92 markets.
New experiments
As part of this deal, Universal Music Group will be an early adopter for Spotify’s future services and marketing products. The label has also signed onto Spotify’s ‘two-sided marketplace’ strategy, through which it plans to launch paid promotional products to artists apart from labels, as per a report by The Wall Street Journal.
Spotify CEO Daniel Ek said that Universal Music Group was an early adopter of products like Marquee that allows labels and artists to promote their new releases with sponsored recommendations and Canvas that enables artists to add their own visual loops to their tracks on Spotify.
India deals
Spotify has also struck three key licensing deals for the India market in recent months. A deal with Saregama in May this year gave the service access to more than 100,000 music tracks across various genres while a deal with Shemaroo Entertainment in April provided its subscribers access to over 25,000 songs across multiple genres and languages.
Spotify had also renewed its global licensing partnership with Warner Music Group in March this year, which included the India market, thereby ending its long-drawn legal battle in the country.
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