March 8th, 2024, Bhawna Singh
2024 started on a rough note for India’s biggest digital wallet company. At the end of January, the Reserve Bank of India mandated Paytm Payments Bank to halt all services, including its wallet, following operational restrictions.
Data from YouGov BrandIndex, daily brand tracking tool, shows that Paytm’s brand health metrics saw a decline post the RBI barred it from offering all kinds of banking services on January 31st. The brand’s Buzz score, that measures whether one has heard something positive or negative about the brand in the past two weeks, declined from 48.7 on the day of the announcement (January 31) to 7.1 at the end of February (Feb 29).
The strong negative buzz around the brand seems to have impacted brand use perception among consumers. During the same time period, Consideration, that measures whether one would consider buying from the brand, fell from 54.6 to 36.9.
Having said that, the impact on current customers of the brand seems to be lesser (from 58.3 to 50.5), suggesting that they may have not completely shifted away from the brand.
When viewed by city tiers, YouGov data shows that Tier-1 and tier-2 cities seem to be more affected by this development. Buzz for Paytm in tier-1 cities declined to -1.1, between January end and February end. Decline in Buzz was equally drastic in tier-2 cities but less pronounced in tier-3 cities of India.
Similarly, decline in Consideration was more dramatic in tier-1 cities (-18.3) and tier-2 cities (of -20.9), although we see some recovery in the latter. Comparatively, decline in tier-3 cities was a bit delayed but accelerated in mid- February.
However, when it comes to Current customers, tier-1 cities seem to be holding fort for Paytm. Tier-2 cities on the other hand, saw the greatest decline in terms of current customers.
With the deadline looming on March 15, Paytm must take quick action to salvage the situation or it may end up losing its customers to alternate platforms.
Commenting on this, Ashwath Rajan, Director of Business Development at YouGov India said, "Since the RBI announcement, chatter around Paytm has been consistently negative leading to consumer sentiments towards the brand reaching an all time low. Across markets, consumers' future intent to continue with the brand, is also showing a downward trend. However, the silver lining during this phase is that consumers are still willing to play the waiting game and are holding off their ruling. Announcements and subsequent consumer reactions in the next couple of weeks will further determine if consumers are moving away from the brand or a possible turnaround is on the cards. Our tool, YouGov BrandIndex is designed to help brands understand consumer sentiments near real-time (via daily interviews) equipping them to take quick decisions that could potentially impact the brand journey."
Learn more about BrandIndex here.