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Samreen Ahmad · · 6 min readBNPL lights up India’s ecommerce sales this Diwali
A few days ago, Flipkart sent out an email with the subject line: festive budget crunch?
The Walmart-backed ecommerce giant was offering its users instant credit of up to 70,000 rupees (US$944) via its buy now, pay later (BNPL) service so that customers could “shop in style” ahead of the Indian festive season and pay the money back over a period of up to 12 months.
Photo credit: Pixabay
What’s more, the company said activation would take only 30 seconds.
Tech in Asia dug deeper into the numbers, and here’s what we found.
The Bengaluru-based company said it saw over 1 million customers opting for its pay-later facility to make purchases during the company’s flagship shopping event, The Big Billion Days 2021, which ran from October 3 to October 10. Lifestyle, grocery, and home goods emerged as some of the top categories.
In comparison, Amazon’s month-long Great Indian Festival Sale 2021, which ended on November 2, brought in over 500,000 new customers to the global ecommerce major’s pay-later program.
See also: Why the time is ripe for ‘buy now, pay later’ in Asia
Amazon also saw about a 10x surge in usage for its BNPL service from Tier 2 and Tier 3 cities.
“During the first day of the Great Indian Festival, we saw about 4x customers signing up for the pay later option, compared to usual business days,” Vikas Bansal, director of Amazon Pay India, tells Tech in Asia.
From big-ticket items such as electronic goods to smaller purchases such as apparel, shoes, and beauty products, BNPL is fast gaining traction with consumers as a mode of payment, as it gives them more purchasing power without pressuring their finances.
Fintech firms like KredX, which enables the use of BNPL via retailers, saw a 110% increase in transaction volumes in October, which marks the onset of the festive season in India.
BNPL is going to make up 15% to 20% of how much young Indians spend, according to Anup Jain, managing partner at Orios Venture Partners.
“This [paying via BNPL] has begun with the most obvious discretionary spending like lifestyle goods, but will also permeate to essentials like health and wellness and even education,” he added.
What is fueling the BNPL fire?
Credit at a convenience
Not a flash in the pan
Focus on the fine print
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Offering credit instantly, buy now, pay later is expected to become a US$50 billion market in India within the next five years.
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