Lizzie Chapman, CEO and Co-Founder at ZestMoney, which claims to be one of the largest and fastest-growing Fintech firms in India, notes that as the festive season begins in India, the company has seen a significant increase in demand for online “affordability” solutions from its customers, retailers, and manufacturers.
“It’s looking like a #DigitalDiwali.”
As reported by local news outlet LiveMint, online festive sales in India are really picking up because of Diwali, which is the Indian festival of lights that lasts around five days and it is celebrated during the Hindu Lunisolar month “Kartika.”
Digital commerce companies in India are reporting a significant increase in consumers using their credit products and solutions, as more local residents are trying to purchase expensive items that they might not be able to buy with cash.
During the first day of its “Great Indian Festival” sale, Amazon India reportedly managed to disburse more than ₹600 crore (appr. $8.17 million) of credit to customers via its “Pay Later” payment option. Amazon India revealed that 3 out of 4 equated monthly installments (EMI) shoppers were from Tier 2 or Tier 3 cities in the country.
An Amazon Pay spokesperson stated:
“This year Amazon Pay launched ‘Amazon Pay Later’ [which] allows customers to shop with more affordability. We have seen 1 out of 3 air conditioners, refrigerators and more than 3.5 lakh phones being sold on EMI. This Great Indian Festival, every second shopper had access to EMIs that were enabled through partnerships with 24 banks and programs like Amazon Pay later.”
A Flipkart representative noted that the COVID-19 pandemic has led to several new categories like mobile devices and laptops emerging as an “essential” item for many consumers. The representative also revealed that their mobile products category has experienced a significant increase in demand from local customers, especially after the Coronavirus outbreak and natiownide lockdowns.
“Pay Later solutions have seen a 50% year-on-year increase in EMI transactions during checkout on Amazon and Flipkart. Electronics, home appliances and mobile phones continue to be the largest category.”
She claims that Covid has changed consumer behavior and preferences for credit, with the “Pay Later” option becoming a widely-used method of settling transactions. She believes that this could turn out to be “the ‘Whatsapp moment’ for digital credit” in the country.