Flipkart is in news again as the e-commerce giant is all set to step its foot in the fintech space with the company now planning to offer credit and insurance products to its customers and sellers.
Several Indian publications reported that the Bangalore based company is right now in the middle of applying for its NBFC license. The credit option would be first made available to its Flipkart’s sellers and customers and with time, the company will expand its financial services offerings beyond its platform.
Even though the platform has tied with players like Bajaj Finance and several banks to offer EMI-based products, almost 60 per cent of company’s customers do not have access to credit. This is why the company feels enough scope in the fintech segment.
An Economic Times report quoted Ravi Garikipati, Senior Vice President, Flipkart saying the homegrown e-commerce platform hopes to see lending products like ‘buy now pay later’ and ‘cardless credit’ for consumers contribute around 15-20 per cent of the company’s growth over the next three years.
“The ‘buy now pay later’ product already has 6-8 lakh users, with a 60 per cent repeat rate, and now about 80 lakh Flipkart customers are eligible for it. The roadmap is to take consumer financing to other online ecosystem players after extending it to portfolio companies (Myntra and Jabong),” he added.
The Seller Story
Credit availability has been one of the key issues among the online sellers and community has time and again raised concerns related to it. However, this is not for the first time Flipkart has tried to bridge the gap.
In 2015, the unicorn startup had launched Growth Capital Programme and had partnered with about eight banks and within its first year had disbursed loans worth over INR 125 crore to more than 800 sellers. The latest status of the programme is unknown.
What is worth a note is that since then a lot fintech startups have cropped in the country who have been into the business of servicing many of these online players through various innovative and disruptive business models.
With the implementation of the goods and service tax, a lot of these online sellers have also now moved to the organized segment with a healthy trail of paperwork. This, in turn, has helped fintech companies to fill the credit loop among these players.
However, considering the past performance of Flipkart’s capital scheme, the company is more likely to have an upper hand among seller financing companies as it will not just GST data but the customer insights, sales projection, inventory status, etc. But will the ball roll in the right direction or no, time will only tell.