Flipkart announced on May 31st that it has partnered with Bajaj Finserv to provide ‘No Cost EMI’s’ to buyers on their online shopping portal. The alliance will allow Flipkart to push big ticket products to untapped audiences.
The availability of small sized personal loans is fragmented and its process is cumbersome; not to mention the processing fees and hidden costs associated with the loan. Less the 1% of the Indian population has access to a credit card, which makes purchasing power for high priced products low.
Flipkart’s new alliance with Bajaj Finserv will offer attractive financing options where a buyer would pay back in EMIs and bear no additional costs. Loan tenure begins with 3 months and goes up to 12 months when purchasing with Flipkart online.
The scheme has been rolled out across select brands and products, which Flipkart plans to build on. The company additionally announced that the ‘Low Cost EMI’ option is one of many other services they plan on introducing through the course of the year.
Flipkart’s Senior Director and Head of Digital & Consumer Financial Services, Mayank Jain, mentions that the new ‘No Cost EMI’ service has the potential to disrupt online shopping just like when they first introduced the option to pay with ‘Cash on Delivery’ (COD).
Flipkart has looked to solve fundamental issues in the e-commerce industry and this alliance providing financial aid to buyers will increase the purchasing power of customers manifold, and let Flipkart increase sales. Along with the company’s other offerings like product exchange and assured buy back, the online shopping portal is bound to garner customer loyalty in a market where the customers’ purchase decisions are governed by price and not necessarily by the quality of service.
Flipkart is India’s largest marketplace with a customer base of over 75 million that are served by over 85,000 vendors. The online shopping portal enjoys a 60% market share in smartphone sales with a total inventory of around 40 million products across 80 categories.