In its latest retreat from India’s bustling online retail market, Walmart-backed fintech giant PhonePe has axed e-commerce app Pincode and will shift the business towards B2B services for offline merchants.
On Thursday, PhonePe founder and group CEO Sameer Nigam said running a consumer-facing e-commerce app had become a distraction from the company’s focus on small retailers. Instead, the company wants to focus on helping stores “achieve operational efficiency, improved margins and visibility,” he said, citing that as its primary goal.
PhonePe launched Pincode in April 2023 as a major push into e-commerce, building on the Indian government-backed Open Network for Digital Commerce (ONDC). The hyperlocal app offered groceries, medicine, food, electronics and home decor from neighborhood stores. It was initially launched in Bengaluru and later expanded to other cities.
In just over a year since launch, Pincode withdrawn from most categories except for the food. Earlier this year, the app shifted to a fast trade modeloffering 10-minute deliveries through local kirana stores and retailers in cities like Bengaluru, New Delhi, Mumbai, Hyderabad and Pune. The company also extended the service to 10-minute drug deliveries in Bangalore, Mumbai and Pune in April.
PhonePe’s Pincode used local shops and retailers for its fast deliveries – unlike competitors like Swiggy, Zomato-owned Blinkit and Zepto, which rely on dark shops. The change did not help Pincode gain ground in the crowded segment, resulting in PhonePe shutting down the service.
Pincode was not PhonePe’s first foray into e-commerce. In 2019 the company “Switch” started, a super-app layer within its payments app that offered access to food, grocery, shopping and travel services.
PhonePe has now closed the Pincode app and he redirected his site on PhonePe main website. The company said it will now focus on working with offline retailers, expanding its B2B offerings. In July, PhonePe said it had digitized over 1,000 local stores in Bengaluru, Pune, Delhi NCR, Hyderabad, Mumbai and Varanasi through Pincode, giving them access to digital storefronts, inventory tools and last-mile delivery services.
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“As part of this strategic decision, we will now focus the resources of the entire Pincode team on accelerating the creation and scaling of a range of B2B business solutions for offline businesses across India,” said Vivek Lohcheb, CEO of Pincode, in a prepared statement.
PhonePe already offers inventory and order management tools, as well as other ERP software for small businesses, and provides direct sourcing and replenishment services in certain categories.
The change comes as PhonePe prepares for an IPO in India, nearly three years after its spin-off from Flipkart. The company filed drafts with the Securities and Exchange Board of India through the confidential advance route in September and is targeting a mid-2026 listing. PhonePe is also looking for ways to grow beyond its position as the country’s dominant payments app in the unified payments interface.
PhonePe did not respond to detailed questions about Pincode’s performance and the timing of the app’s shutdown.
