Flipkart digs deep into India's fintech market; clocked 40% growth in 2019

From providing consumer credit, device insurance to seller financing, Flipkart's fintech category grew 40 per cent in 2019.

Walmart-owned e-commerce firm Flipkart has increased its focus on the Indian fintech market and took on rivals such as Amazon and Alibaba-backed Paytm. Flipkart’s overall fintech category, which comprises consumer credit constructs, device insurance, and seller financing, grew 40 per cent in 2019. As the company brings the next 200 million consumers online, it aims to significantly multiply the number of users having access to its fintech products and services. This includes tier-2 and tier-3 cities where it is seeing a lot of traction.

“We are now able to enable 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 the 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 anybody and 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 PwC and industry body Assocham. Emerging markets are leading the way with both China and India at 87 per cent fintech adoption rate in 2019, which is significantly higher than the global average rate of 64 per cent, according to EY’s Global FinTech Adoption Index 2019.

Ravichandran said that the company has adopted a three-pronged strategy to tap the fintech market in the country. 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 the aspirational products of their choice. It is also using innovative insurance technologies to give a “hassle-free” buying experience to the customers.

Flipkart massively ramped up the scale of its fintech offerings ahead of the festive season last year, to increase access to credit and affordability options for shoppers across the country. Constructs like ‘Flipkart Pay Later’ and ‘Cardless Credit’ opened up access to credit for 55 million Indians ahead of the festive season in 2019. Flipkart said these offerings are in-house fintech innovations, introduced to make the online shopping experience more seamless and affordable for Flipkart’s more than 200 million customers. ‘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 wanting 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 program, ‘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’ 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, a new payment solution now available on Flipkart platform, 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 also ensuring a completely secure payment experience. Flipkart said it hopes to reduce the steps in the payment system. The aim is to help consumers complete their purchase journey with ease, primarily in regions where internet connectivity and e-literacy are scarce.