How India’s fastest-growing smartphone brand Realme is planning a fintech disruption

Realme (stylised as realme) is one of the youngest smartphone manufacturers in the world. What started as a sub-brand of China’s OPPO a decade ago became a full-blown independent entity in May 2018. 

Since then, realme has expanded into 20 markets, including India, and broken into the list of top 10 mobile manufacturers globally. In 2019 alone, the brand grew a whopping 848 percent, according to Counterpoint Research. 

India is driving a lion’s share of this rapid growth with realme enjoying immense popularity in the 18-30 years age bracket. The brand’s promise of “affordable technology” has managed to woo value-conscious Indian millennials. 

In 2019, it recorded the highest growth rate (255 percent) among all smartphone brands in the country. The company’s market share grew from three percent to 10 percent in a year, making realme India’s fourth-largest smartphone seller, Counterpoint reveals. 

Anshika Jain, Research Analyst at Counterpoint, explains, “The growth of realme was driven by an aggressive go-to-market strategy that involved launching several industry-first features with strong design language. This is resonating well among young consumers seeking value-for-money devices,”

‘Aggressive go-to-market’ and ‘industry-first features’ being the two operative words. 

realme says it has already built a “strong relationship” with over 100 million customers, 80,000 multi-brand stores, and nearly 30,000 promoters across India. However, not content with mere phone sales, it decided to venture into services, which is fast emerging as the next battleground for India’s mobile manufacturers. 

In April 2019, the company incepted realme PaySa, a full-stack financial services platform. It roped in veteran banker Varun Sridhar to lead the product and make a dent in India’s burgeoning fintech landscape. 

PaySa’s core proposition

Varun, a banking veteran of 20 years with stints at Citibank, Deutsche Bank, BNP Paribas, and others, sums up PaySa’s core proposition succinctly.

“We aspire to bring about a meaningful change in the lives of customers by making their access to financial services simpler, cheaper, and faster,” he tells YourStory. 

But behind the one-line brand proposition lies the company’s long-term vision for the 400 million Indians who still do not have access to formal credit. 

realme PaySa wants to enable “meaningful financial inclusion” for this segment of Bharat — a goal outlined through a dash of Devanagari in its logo. And, the company is putting all the distribution might it acquired over the last 18 months behind it. 

Varun elaborates,

“With PaySa, we wanted to bring financial products to 18-30-year-olds, who make up our user community. This segment is driving India’s GDP. Before going live, we interacted with them and thousands of dealers and distributors to understand customer needs and expectations. We realised that what moves is money irrespective of the transaction – food, travel, shopping, entertainment, etc. Hence, access to money has to be simplified through customers’ entire life cycle.”

PaySa launched on Google Play Store and realme’s native app store in December with a four-pronged service offering: lending, savings, payments, and protection. At present, the focus is on lending – a segment of fintech that has exploded since 2018.

How the platform works

The platform disburses small-ticket digital loans to individuals and SMEs in India’s Tier II, III, and IV cities. Personal loans can range anywhere between Rs 8,000 and Rs 100,000 while SME loans can go up to Rs 500,000. Larger loan requirements would also be serviced in-person by realme PaySa teams in different cities across India. 

Varun says,

“We’re planning to launch UPI payments by the end of 2020, and will also get into PPIs, mutual funds, and SIPs at some point. The goal is to become an end-to-end financial services platform that can engage with customers for all needs.”

PaySa generates free credit reports for customers to check their eligibility, enables quick loan approval, and facilitates instant transfers to the applicants’ bank accounts.

It offers customers flexible repayment cycles of 12 to 60 months – a move aimed at improving accessibility for the most needy.

Varun explains,

“India has traditionally been a country of savers. Slowly, it is turning to borrowing very small amounts to be able to upscale and address its needs. But, the cost of a loan for Tier-IV customers is still quite high. So, we are trying to ease that access with longer repayment cycles tailored for people who’re new to credit.”

To expedite customer acquisition, realme is even pre-installing the PaySa app on its handsets and educating buyers through physical stores, channel partners, and thousands of retail touchpoints across the country. 

And, it seems to be bearing fruits already. 

Demand and growth projections

In less than three months, realme PaySa has recorded 100,000 downloads across app stores, received 10,000 personal loan and 7,000 business loan applications, and generated 50,000 credit reports.

The loan ticket size ranges from Rs 15,000 to Rs 25,000, with maximum demand coming from millennial men in Tier II and III towns. The platform has also received over 1,000 requests for its screen insurance product. 

“All this, without spending a penny on marketing,” Varun gloats. 

“We are leveraging our existing distributor networks to spread the word on PaySa. We also have about 60 salespeople on ground who are making buyers aware,” he adds. 

To facilitate its services, realme has tied up with multiple ecosystem partners – CreditMantri for credit reports, EarlySalary for individual loans, Lendingkart for SME loans, and ICICI Lombard for screen insurance. It is in talks with other players too as it adds more services and features to the PaySa platform. 

realme expects to disburse individual loans worth Rs 5,000 crore to 25 million customers in the next three years. By the end of 2020, it looks to onboard one million customers. By 2023, it also plans to disburse Rs 125 crore worth of business loans to about three million SMEs across 90 percent of India’s pincodes. 

Varun shares, “We are looking to break even by the third year. Payments will be the main source of customer acquisition going ahead, and we’ll generate revenues from commission fees on loans, insurance, and other products.” 

Industry landscape and breaking the clutter

Given the abundance of digital credit solutions in India, and a few other phone manufacturers also tapping into ancillary services like financial services, entertainment, etc., realme’s growth path may have several challenges.

In fact, PaySa draws inevitable comparisons with Mi Credit, Xiaomi’s recently-launched lending marketplace. The latter has also signed up with several partners, including EarlySalary (which distributes loans through PaySa too). 

In an earlier interaction with YourStory, EarlySalary Co-founder and CEO Akshay Mehrotra said: “The next phase of growth for lending companies will come from B2B2C channels like PaySa. We are powering the platform with our own product interface. With credit and payments becoming an important part of monetisation for most companies, this serves as a great customer acquisition system for us.”

Varun singles out that unlike Mi Credit, which is its most ostensible competitor at present, PaySa is a “full-stack player”. “Financial services are for life. We want to be your partners for everything, not just for a single product,” he observes. 

In order to distinguish itself from other fintech products in the market, realme plans to leverage its OS, tech capabilities, language innovations, and more. 

He says,

“We already have some natural advantages with hardware, software, and distribution. Our users want PaySa to be as easy as Instagram or TikTok. And since we are deeply focussed on Bharat, we’ll also create some language differentiation.”

With more than 300 million Indians waiting to be ‘fin-cluded’, realme is just getting started!

(Edited by Saheli Sen Gupta)