India’s leading e-commerce platform, Flipkart, has embarked on a new initiative to offer customer lending services, in a bid to enhance its financing options and potentially result in massive sales growth. This move comes as Flipkart’s main competitor, Amazon, has indicated a slowdown in its operations within India.
In collaboration with Axis Bank, Flipkart now provides customers with access to credit up to 500,000 Indian rupees (approximately $6,100), as described on its mobile app. The loan application process is designed to be hassle-free, with no need for document submission, and the approval time for loans applied for is widely estimated to be as quick as 30 seconds. The company’s aim is to deliver a seamless borrowing experience for its customers, as outlined in the app. This development was earlier reported by the Indian news outlet, the Arc. However, Flipkart has chosen not to comment on the matter at this time.
By introducing personal loan services, Flipkart expands its existing range of financial services, which already includes a “buy now, pay later” option and a co-branded credit card. E-commerce giants in India have long recognized the importance of providing an array of comprehensive financing options to address the local customer’s cautious approach to credit and tendency to be frugal. By offering their customers such financial services, companies can alleviate the immediate burden on customers, leading to increased transaction volumes and fostering customer loyalty. Enabling consumers to make significant purchases and stagger payments promotes spending and drives substantial revenue growth for these platforms.
It is worth noting that Flipkart’s foray into the financial services arena also encroaches upon the territory formerly dominated by PhonePe, its former subsidiary. Since their separation last year, competition between Flipkart and PhonePe has intensified. PhonePe made its entry into the e-commerce space earlier this year, further intensifying the rivalry between the two companies.
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