E-commerce rides finance wave

E-commerce rides finance wave

E-commerce firms Flipkart and Amazon are offering a slew of fintech and credit products to make purchases even more affordable than the discounted offers in the coming festive sales.

These include partnerships with banks for broader coverage of debit card EMIs, alliances with digital non-banking financial companies (NBFCs) for no-cost EMIs and boosting buy-now-pay-later offers.

Walmart-owned Flipkart, which has partnered with more than 20 banks and financial institutions, will be targeting nearly 70 million customers this festive season with its credit products.

Amazon India aims to reach more than 50 million buyers through its credit schemes.

In partnership with Samsung, Flipkart has introduced a ‘Smart Upgrade’ plan, where users can buy a Samsung Galaxy smartphone by paying 70% through EMIs, with the remaining 30% taken off the price of the next smartphone upgrade. After a year, customers can upgrade to a new phone on Flipkart and return the initial phone purchased, and if the customer wishes to retain the initial device, they can pay the 30% after 12 months.

Flipkart has also partnered with lenders like Federal Bank which have more tier-II customers, and with Paytm wallet to expand payment options for this segment of users.

“We have expanded our partnerships and have launched a simpler way to avail credit for first-time and tier- II shoppers. Through our partnership with Bajaj Finserv, customers can try availing credit through their phone numbers instead of putting their debit card number, which is a complicated process for first-time digital users,” Smrithi Ravichandran, business head-payments, consumer and commercial lending and insuretech at Flipkart, said in an interview.

Flipkart rival Amazon has also been ramping up its affordability and EMI offerings and has partnered with more than 25 banks and financial institutions to provide no-cost credit to tier-II customers.

Amazon India said during the first three days of its 2019 Diwali sale, 75% of credit-seekers on its platform were from tier-II cities. It expects a similar ratio of customers availing credit for shopping this festive season as well.

“We have ramped up coverage of our EMI-based credit products to help customers with affordability, keeping their monthly budget in control. Debit-card EMI will be a critical product for tier II and III buyers this festive season. We have also increased the down payment cycles from 6 months to 9 months for credit cardholders,” said Vikas Bansal, director-Amazon Pay.

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