Ajay Sondhi

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Paytm has benefitted exponentially from the dramatic move to digitise the Indian economy, being at the right place at the right time with the right product. The challenge it faces is whether it can expand its value proposition and distribution platform quickly enough to retain customers and maintain/grow its position. The banks are quickly rolling out their own Aadhar/UID based P2P payment systems, as is the Indian Govt itself. As an e-wallet, Paytm is inherently transactional in nature and requires its e-wallet to be replenished from external sources periodically, whereas the banks own the client relationship. As a payments bank license holder, regulations preclude Paytm from offering many of the products and services that full banks offer their clients. Perhaps one strategic opportunity for Paytm is to look to be acquired by a bank that would value its client base and technology platform.

On February 2, 2017, Ajay Sondhi commented on Airbnb: Helping the World Belong Anywhere :

The AirBnb business model leverages the network effect very astutely. The mutual review system by users and hosts provides high integrity and credibility in property reviews and ratings, and prevents the system from being gamed. There is also a social network at play, since many users come as guests and leave as friends. AirBnb has expanded into the business travel space, and even some regular hotels find that listing on the AirBnb platform provides better revenue realisation than selling rooms through OTAs. One of the biggest challenges that AirBnb faces is that the disruption it is causing to the traditional hospitality industry around the world is leading to regulatory and political issues. However, given that it is generally the average home-owner (AirBnb host) who is benefitting from selling his/her excess home capacity, politicians will likely find it difficult to antagonise their vote bank, which places AirBnb in a relatively strong position.

Amazon has built a global juggernaut of a business, and has created formidable entry barriers for competitors as well. Fulfilment of customer demand entails huge logistical capabilities and supply chains that Amazon has built and perfected over time. Amazon is constantly innovating, such as with last-mile delivery mechanisms using drones, and envisages continuing making substantial investments into the future. Till recently it was difficult to analyse Amazon’s numbers and business, and it’s only when they started breaking out the AWS numbers that the street appreciated the enormous operating leverage in the business.