Monday, December 29, 2008

Hey! Who needs a wallet to shop?


IIPM Programme :- SUPERIOR COURSE CONTENTS

With unique offerings in the Indian VAS sphere, Oxigen plans to make the most of the maturing Indian telecom market. 4Ps B&M’s pawan chabra presents an insight on this emerging player in the Indian VAS industry...


Consider a situation where your mobile phone replaces your wallet. And, what more can you ask for than to get relieved from the long standing queues at various bill payment counters! What if it’s done just by clicking a few buttons on your mobile phone? Sounds like a dream?! But no more as that’s exactly what Oxigen Services (India) Pvt. Ltd. plans to do with its newly launched product called ‘OxiCash’.

Working on the lines of PayPal, (a US based subsidiary of eBay) OxiCash is one of its kind offering in the Indian value added services (VAS) sphere by Oxigen. “PayPal is very popular in the US and is recharged only through credit or debit card. But the worst part is still almost 20-25% population of United States doesn’t hold a bank account, so, talking about the potential of a product like this in India, it has enormous potential to grow,” avers Pramod Saxena, Founder and Chairman Oxigen Services (India) Pvt. Ltd. Certainly true and if banked upon rightly, OxiCash happens to be a billion dollar opportunity for Oxigen that started its operations just four years back in 2004.

Well, the idea of starting the company emerged out of a vision of Pramod Saxena, who in association with South African Blue Label Telecom, made all possible arrangements to take on the Indian telecom VAS sphere by storm. And with the kind of performance the company has shown in the last four years, its existence has surely emerged as a threat to many. In fact, Oxigen’s growing popularity has even forced the global software giant, Microsoft to acquire a whopping 35% stake in the company in January earlier this year.

The alliance with Microsoft will not only make Oxigen stronger on the financial grounds, but will also enable the company to expand its business rapidly in the virtual payments and distribution space by making use of Microsoft’s web and mobile based technologies. Another major advantage that the company has gained through its association with Microsoft is that Oxigen can now also access Microsoft’s advertising services. However, other than Microsoft, Blue Label Telecom holds 35% stake in the company while the remaining 30% is held by Saxena and other employees of the company.


With a vision to be a pan India virtual distribution network for electronic delivery and payment of prepaid and post-paid services of all kinds, the company is all set to give some more innovative products to the Indian VAS industry. “We started this business forecasting the growth in the Indian pre-paid sphere and the various dimensions where it will be entering in the future. We wanted to become a one-stop shop for recharging mobile phones and then slowly we moved on to post-paid and other services. OxiCash is the first major diversification that has come out of our door,” Saxena shares with 4Ps B&M. And no doubt, this has paid them well too. With the current turnover of Rs.7 billion the company at present is a leader in the area of bill payments and prepaid services in the country. Moreover, with its pan India retail network, Oxigen currently holds 50,000 touch points which it wants to increase to a mind-boggling figure of 2,50,000 by 2010. This is certainly an essential step for the growth of the company, as it will be distributing its neonate in the VAS sphere through these touch points only.

The company is also equally focusing on the rural areas, as it believes that Oxigen is more prominent in these areas. “Oxigen has much deeper penetration in the rural areas as compared to any other telecom operator in the country, this acts as a major plus point in our business model,” Mehar Sarid, Director – Brand, Marketing & VAS Oxigen services (India) Pvt. Ltd. tells 4Ps B&M. Even a study on the Indian VAS industry shows that the usage of VAS services in the rural parts of the country is increasing very fast as compared to the growth of the usage of VAS services in the urban population. “The Indian VAS market is expected to reach a figure of more than $2 billion by the end of 2008 and with the retail sector getting organised by the day in the country, the company has enormous potential to grow in the coming times,” avers a recent report on the sector by PwC. Even the company is going gung ho over the potential the industry has and as such doesn’t want to leave any stone unturned. To create a buzz over its new offering, OxiCash the company has recently launched a TVC featuring their brand ambassador, Javed Jaffery. When asked about the selection of Javed as the brand ambassador, Sarid states, “We had gone through many names in the industry before finalising with Javed, as according to us he is the person who connects the best with the audience for a product offering like we have.”

Other than Oxigen cash and Oxigen Services, this company has another innovative service called MobiBuzz, which is all set to take the market by storm. With a strong backing of more than 50 content partners’ worldwide and its own video production house in Mumbai, this service is capable enough of providing the world’s finest content to its customers.

Though, the Indian VAS market is still in its emerging phase as compared to the global markets, where VAS services have entered into a more mature phase, in the near future the Indian market is all set to touch new heights. With the aggressive plans that the company has for the Indian market the company’s balance sheet can grow many folds if the fine work that is being done by the company on papers is successfully rolled out in the market.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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