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In India, buying alcohol industry is primarily driven by cash. One strong reason for this is that, by law, alcohol cannot be purchased or sold online in the country. However, Chennai-based entrepreneur is disrupting the payment processes in this industry with the launch of a mobile wallet named “HipBar” that allows users to pay for their alcohol orders. It is compliant with the regulatory framework as the user does not buy alcohol via the app but only makes payment through it. Reserve Bank of India has provided the certification to HipBar and the app has registered more than 6,000 downloads in the first week. The app claims a conversion rate of active users with 80% of those downloading also actively using the app. On an average, transactions worth INR150,000 are registered in any single day.
The app utilizes semi-closed prepaid payment instruments, which as per the RBI – “are the payment instruments which can be used for purchase of goods and services, including financial services at a group of clearly identified merchant locations/ establishments which have a specific contract with the issuer to accept the payment instruments. These instruments do not permit cash withdrawal or redemption by the holder.” As per this, once the user loads money into HipBar, he will be eligible for a prepaid alcoholic beverage. The balance amount in the wallet can be utilized for succeeding orders or redeemed against an order at a bar or restaurant. The prices of beverages are currently arrived after negotiations between HiBar and retail outlets.
HipBar, launched initially in Bangalore caters to a niche segment of customers and connects bars and restaurants in the region. Currently it has partnered with Social, Smoke House Deli, Sotally Tober, Open Box, and Watsons. Even retailers that sell other food & beverages apart from alcohol have also announced their collaboration with HipBar. The app allows retailers and alcoholic brands to promote their products in the app, provide coupons, and loyalty discounts to users. Additionally, brands have the opportunity to integrate location-based marketing. Through push notifications, transportation apps such as Uber and Ola can do responsibility advertising by offering discounted rides to customers who have just paid for their drink using HipBar.
Transaction value of mobile commerce is expected to record a CAGR of 99.0% during 2017 to 2021 to reach US$ 2,47,697 million by 2021, an increase from US$ 15,783 million in 2017. The transaction value of Indian mobile commerce market recorded a growth rate of 123.3% in 2015 to reach US$ 6,163 million in 2016.
To know more and gain deeper understanding of mobile payment industry in India, click here.
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