▼ Summary
– PhonePe has shut down its consumer-facing Pincode e-commerce app to shift its focus away from quick-commerce and toward providing B2B services for offline merchants.
– The Pincode app was launched in 2023 on India’s ONDC network, offering hyperlocal deliveries from neighborhood shops, but it struggled to compete in the crowded market.
– The service had recently pivoted to a quick-commerce model with 10-minute deliveries but failed to gain significant ground against rivals using dark stores.
– PhonePe will now concentrate on expanding its B2B offerings, such as digital storefronts and inventory tools, to help offline retailers improve efficiency and margins.
– This strategic shift occurs as PhonePe prepares for a public listing in India, seeking to grow beyond its core position as a leading payments app.
In a significant strategic pivot, PhonePe has discontinued its Pincode consumer e-commerce application, marking a full retreat from the competitive online retail space. The Walmart-backed fintech leader will now channel its efforts exclusively into building business-to-business (B2B) solutions for offline merchants across India. According to company founder and group CEO Sameer Nigam, managing a consumer-facing quick-commerce platform had become a distraction from the firm’s central mission of empowering small retailers. The renewed focus aims to assist these local stores in boosting their operational efficiency, improving profit margins, and gaining greater market visibility.
The Pincode app was initially launched in April 2023 as a major foray into e-commerce, built upon the government-supported Open Network for Digital Commerce (ONDC). It functioned as a hyperlocal marketplace, allowing users to order groceries, medicines, food, electronics, and home décor items from neighborhood shops. After debuting in Bengaluru, the service expanded to several other metropolitan areas. Within its first year, however, Pincode had already scaled back, eliminating most product categories except for food delivery. Earlier this year, it adopted a quick-commerce model promising 10-minute deliveries through local kirana stores and retailers in cities including Bengaluru, Delhi, Mumbai, Hyderabad, and Pune. This April also saw the introduction of 10-minute medicine deliveries in select locations.
PhonePe’s Pincode strategy differed from key rivals like Swiggy, Zomato-owned Blinkit, and Zepto, as it leveraged existing local shops for fulfillment instead of relying on dedicated dark stores. Despite this distinctive approach, the service struggled to capture meaningful market share in the intensely crowded quick-commerce segment. This lack of traction ultimately led to the decision to wind down the consumer app entirely. The Pincode website now redirects to PhonePe’s main site, signaling the end of this venture.
This is not PhonePe’s first attempt to diversify beyond digital payments. Back in 2019, the company introduced “Switch,” a super-app layer within its primary application that provided users with access to food delivery, grocery shopping, and travel services. The closure of Pincode represents a consolidation of strategy back to its B2B roots. The company has stated it will now concentrate on expanding its offerings for offline retailers. In July, PhonePe reported it had digitized more than 1,000 local stores across six cities through the Pincode initiative, equipping them with digital storefronts, inventory management tools, and last-mile delivery capabilities.
Vivek Lohcheb, CEO of Pincode, confirmed the strategic shift in a statement, noting that the entire Pincode team’s resources would be redirected toward accelerating the development and scaling of a comprehensive suite of B2B solutions for offline businesses nationwide. PhonePe already provides small businesses with various tools, including inventory and order-management systems, other ERP software, and direct sourcing services in certain categories.
This strategic realignment coincides with PhonePe’s preparations for a public listing in India. The company, which was spun off from Flipkart nearly three years ago, filed draft papers confidentially with the Securities and Exchange Board of India (SEBI) in September and is targeting a mid-2026 listing. Moving beyond its dominant position as a payments app on the Unified Payments Interface (UPI) is a key growth objective as it approaches this milestone. The company did not provide detailed comments regarding Pincode’s specific performance metrics or the precise timing behind the app’s shutdown.
(Source: TechCrunch)
