PhonePe Pincode App Shut Down: Walmart's E-commerce Strategy

PhonePe Scales Back E-commerce Efforts in India

In a recent development, PhonePe, the fintech company supported by Walmart, has decided to discontinue its Pincode e-commerce application. This move signifies a strategic realignment towards providing business-to-business (B2B) services specifically tailored for offline retailers within the Indian market.

Shift in Focus to B2B Services

Sameer Nigam, founder and group CEO of PhonePe, articulated on Thursday that maintaining a direct-to-consumer quick-commerce application proved to be a diversion from the company’s primary objectives. The company’s central aim is now to empower small retailers by enhancing their operational efficiency, boosting their profit margins, and increasing their market visibility.

Pincode's Launch and Evolution

PhonePe initially launched Pincode in April 2023 as a significant foray into the e-commerce sector. The application was constructed upon the foundation of the Indian government’s Open Network for Digital Commerce (ONDC) initiative.

The hyperlocal app initially provided a diverse range of products, including groceries, pharmaceuticals, prepared foods, electronics, and home furnishings, sourced from local shops.

From Hyperlocal to Quick-Commerce and Back

Within just over a year of its inception, Pincode narrowed its focus, withdrawing from most product categories except for food delivery. Subsequently, the app transitioned to a quick-commerce model, promising deliveries within 10 minutes through partnerships with local kirana shops and retailers in major cities like Bengaluru, New Delhi, Mumbai, Hyderabad, and Pune.

In April, the service was further expanded to include 10-minute delivery of medications in Bangalore, Mumbai, and Pune.

A Different Approach to Delivery

PhonePe’s Pincode distinguished itself from competitors such as Swiggy, Blinkit (owned by Zomato), and Zepto by utilizing existing local stores for its rapid deliveries, rather than relying on dedicated dark stores.

Despite this unique approach, Pincode struggled to gain substantial traction in the highly competitive quick-commerce landscape, ultimately leading to the decision to discontinue the service.

Previous E-commerce Ventures

Pincode wasn’t PhonePe’s first attempt at entering the e-commerce arena. In 2019, the company introduced “Switch,” a super-app layer integrated within its payments application, offering users access to a variety of services including food ordering, grocery shopping, and travel bookings.

Redirection and B2B Expansion

PhonePe has now ceased operations of the Pincode app and redirected its website traffic to the main PhonePe website.

The company is now prioritizing collaboration with offline retailers by broadening its suite of B2B offerings.

In July, PhonePe reported having digitized over 1,000 local stores across key cities – Bengaluru, Pune, Delhi NCR, Hyderabad, Mumbai, and Varanasi – through Pincode, providing them with digital storefronts, inventory management tools, and last-mile delivery solutions.

Statement from Pincode CEO

Vivek Lohcheb, CEO of Pincode, stated that the company will dedicate all of the Pincode team’s resources to accelerating the development and scaling of B2B business solutions for offline businesses throughout India.

Existing B2B Offerings

PhonePe currently provides small businesses with inventory management and order management tools, alongside other enterprise resource planning (ERP) software.

The company also facilitates direct sourcing and replenishment services in select product categories.

Preparing for a Public Listing

This strategic shift occurs as PhonePe prepares for a potential public listing in India, approximately three years after its separation from Flipkart.

The company submitted preliminary documents to the Securities and Exchange Board of India (SEBI) through a confidential pre-filing process in September, with a target listing date in mid-2026.

PhonePe is also actively exploring avenues for growth beyond its current dominance in the country’s Unified Payments Interface (UPI) payments sector.

Lack of Public Commentary

PhonePe declined to provide detailed responses to inquiries regarding Pincode’s performance metrics and the specific timing of the application’s shutdown.