The Jio-Facebook partnership could bring a change in consumers' behaviour and the industry will be benefited from it, said Vijay Shekhar Sharma, Founder of Paytm, adding that his e-commerce firm will also be among the beneficiaries.

“It takes a huge amount of capital to change customer behaviour and it took us tens of thousands of crores to make users pick up the phone and scan a QR code. We spent more money than government programs cumulatively to change the behaviour,” said Sharma.

“But what we were not able to do was the business around online-to-offline (O20), where an item will be shipped from a local store to your home," added Sharma.

Paytm Mall which is the e-commerce arm of Paytm’s larger business that was founded in 2016 to crack the O2O model in India. In April, the company announced plans to partner with over 10,000 kirana stores, small shops and businesses to scale up hyperlocal deliveries in more than 100 cities pan India.

Interestingly this announcement came in just a few days after Reliance Industries announced that Facebook was investing Rs 43,574 crore ($5.7 billion) in its subsidiary Jio Platforms for a 9.99 percent stake. The investment made Facebook the largest minority shareholder in Jio Platforms and values the RIL technology arm at Rs 4.62 lakh crore ($66 billion) pre-money enterprise value.

“Jio-Facebook partnership may be calling the country where consumers start to place orders to neighborhood stores. Once this takes off, everyone in the industry will benefit and we will also be a beneficiary," said Sharma when CNBC-TV18 asked if he was intimidated by this integration.

He added, “We don’t do commerce. Jio-Facebook is looking to do commerce. If their combination can bring commerce when you are used to ordering on the phone from a nearby store, that’s a good change in behaviour.”

While he may seem to suggest that Paytm Mall will be seamlessly swimming along these O2O waves, in the ocean of ‘healthy competition’, Jio-Facebook partnership will also append the fin-tech sector. Facebook backed WhatsApp’s technology and familiarity, combined with Jio’s massive network and reach, can lead to a payments product that can take on established players like Paytm and Google Pay in India.

“Payments customers will use the app where there are a lot of funding sources. Paytm is the only app that provides an option of a wallet, card payment, bank-link payment and even creating a funding source like credit card. That is not possible in a UPI business model. UPI adds zero commercial value but incrementally changes behaviour," says Sharma.

He summed up by reiterating, “We have seen competition ever since we started payments. But even today Paytm is a market leader, even by combining everyone else”.

First Published:May 21, 2020 9:02 AM IST