“We are now able to provide credit to about 65 million customers out of the base of 200 million customers. About 40-45 per cent of the customers don’t have access to credit outside of the system at all,” said Smrithi Ravichandran, head of business for fintech and payments group at Flipkart.
“As the 200 million Flipkart
customer base becomes 300 million in the next 3-4 years, our (aim) is to significantly multiply this 65 million. Our ambition is to give credit to everybody.”
The overall transaction value in the Indian fintech
market is estimated to jump from approximately $66.1 billion in 2019 to $137.8 billion in 2023, growing at a CAGR (compound annual growth rate) of 20.18 per cent, according to a report by PricewaterhouseCoopers and industry body Assocham.
Emerging markets are leading the way, with both China and India at 87 per cent fintech adoption rate in 2019, significantly higher than the global average of 64 per cent, according to EY’s Global FinTech Adoption Index 2019.
Ravichandran said the company has adopted a three-pronged strategy to tap the fintech market. This includes enabling frictionless payment at scale using data insights, distribution and technology, and enabling credit especially to tier-2 and tier-3 customers and helping them buy aspirational products of their choice. It is also using innovative insurance technologies to give customers a “hassle-free” buying experience.
Flipkart ramped up its fintech offerings ahead of the festive season last year, to increase access to credit and affordability options for shoppers. Constructs like ‘Flipkart Pay Later’ and ‘Cardless Credit’ opened up access to credit for 55 million Indians ahead of the festive season.
Flipkart said these offerings are in-house innovations, introduced to make the online shopping experience seamless and affordable. ‘Flipkart Pay Later’ and ‘Cardless Credit’ grew more than 30 per cent in 2019.
“Driving credit access and penetration is very critical and core focus (for Flipkart) and we would continue to heavily invest in the next couple of years,” said Ranjith Boyanapalli, head of fintech and payments group at Flipkart. “The reason we are extremely confident and want to invest is that we have the right distribution and technology capabilities and the right insights to make this happen.”
Flipkart said its seller lending programme, ‘Growth Capital’ grew 70 per cent in 2019, which has helped fuel the business aspirations of thousands of MSMEs (micro, small and medium enterprises) and sellers across the country.
The company also forayed into the insurance segment for the first time in 2018 with the ‘Complete Mobile Protection’ programme and launched ‘Complete Appliance Protection’ in 2019. The firm said these programmes have seen a phenomenal response from customers. During TBBD (The Big Billion Days) sale in 2018 and 2019, on average 1 in 3 appliances (mobiles, TV and large appliances) sold on Flipkart was with ‘complete device protection.’
Last month, Flipkart unveiled the launch of Visa Safe Click (VSC), powered by Visa, the payments technology giant. VSC will enable the e-commerce platform to deploy India’s first in-app device-based network authentication solution.
This solution will eliminate the need for one-time passwords (OTP) for transactions up to Rs 2,000, while ensuring a completely secure experience. Flipkart said it hopes to reduce the steps in the payment system. The aim is to help consumers complete purchase with ease, primarily in regions where internet connectivity and e-literacy are limited.
Aiming for more
Overall transaction value in the Indian fintech market to reach $137.8 billion in 2023 from $66.1 billion
Flipkart’s overall fintech category grew 40 per cent in 2019
As the company brings the next 200 million consumers online, it aims to significantly multiply the number of its fintech users
This includes tier-2 and tier-3 cities where it is seeing a lot of traction