 "HDFC Bank to double spends on its Smart Buy to Rs 1,000 cr in FY17")
Banks have been riding on the e-wave at a time when both shopping and banking online has increased. Making the most of this, HDFC Bank, the country’s second-largest private sector lender, SmartBuy aims to double the spends on its marketplace. “Within this financial year, SmartBuy will have spends of over Rs 1,000 crore. In the last financial year, we were a little short of Rs 500 crore,” said a company official requesting anonymity.
HDFC Bank’s SmartBuy, which was launched last year, is a marketplace which has tie-ups with various merchants and the bank’s debit or credit customers can shop via this platform. However, considering it is a bank, it is restricted from selling goods directly. The lender had explained its rationale for getting into this space saying they have a wide network both on the customer and the merchant side and it makes sense to connect the two on a common platform as it ensures customer stickiness.
In order to increase spends on this marketplace, the lender plans to increase the merchant tie-up in the online space. It is also planning to expand the product base offered via the site to financial products as well as other verticals within clothing etc. It has also started tapping retailers and merchants in the offline space and is looking at aggressively building this up, especially in the smaller towns and the rural areas.
In fact, HDFC Bank is not the only one. Several mobile wallet players have also been trying to increase their reach in the offline space and are tying up directly with brick-and-mortar retailers. The lender believes that in order to grow its marketplace, it will have to continue to strengthen its other channels such as cards and Point of Sales (PoS) network. In fact, according to the latest Reserve Bank of India data, at the end of March 2015, HDFC Bank was the leader in the credit card space with 7.28 million cards and had 22.99 million debit cards. It also had the second largest network of PoS terminals at 0.28 million.
HDFC Bank’s SmartBuy, which was launched last year, is a marketplace which has tie-ups with various merchants and the bank’s debit or credit customers can shop via this platform. However, considering it is a bank, it is restricted from selling goods directly. The lender had explained its rationale for getting into this space saying they have a wide network both on the customer and the merchant side and it makes sense to connect the two on a common platform as it ensures customer stickiness.
In order to increase spends on this marketplace, the lender plans to increase the merchant tie-up in the online space. It is also planning to expand the product base offered via the site to financial products as well as other verticals within clothing etc. It has also started tapping retailers and merchants in the offline space and is looking at aggressively building this up, especially in the smaller towns and the rural areas.
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“We will try and go hyper-local and we can look at listing of merchants in these small towns and rural areas. In fact, we are in the process of deploying SmartBuy rural. The merchant gets footfalls and we get better visibility. So with SmartBuy, which started as an online consumer marketplace, we are actually creating a bank single view/shopping platform that connects not only online but also offline,” the officer said.
In fact, HDFC Bank is not the only one. Several mobile wallet players have also been trying to increase their reach in the offline space and are tying up directly with brick-and-mortar retailers. The lender believes that in order to grow its marketplace, it will have to continue to strengthen its other channels such as cards and Point of Sales (PoS) network. In fact, according to the latest Reserve Bank of India data, at the end of March 2015, HDFC Bank was the leader in the credit card space with 7.28 million cards and had 22.99 million debit cards. It also had the second largest network of PoS terminals at 0.28 million.