E-commerce transactions were up by 200 per cent during this period, and the categories driving growth included online electronics, smartphones, Edtech, fashion, home decor among others.
Consumer demand has been up by more than 200 per cent in the second phase of lockdown (March-May 21), as compared to the lockdown last year (March to May 2020), according to a survey report by ZestMoney, the Buy Now, Pay Later platform.
Customer applications for the BNPL credit limit on the platform itself went up by 5 times in the March-May 2021 period as more people took to planning their finances better. The BNPL platforms claim strong consumer behaviour around repayments, bounce rates signalled green shoots of recovery and a revival in consumer demand.
E-commerce transactions were up by 200 per cent during this period, and the categories driving growth included online electronics, smartphones, Edtech, fashion, home decor among others. Bangalore, New Delhi and Mumbai were the top 3 metros witnessing the highest BNPL transactions, while Jaipur, Lucknow and Vishakhapatnam emerged as the top 3 non-metro markets. Top categories that respondents were likely to spend on in the coming months: Smartphones, electronics, fashion, home décor, water purifiers and air tickets. The survey also revealed that 62 per cent of people planned to splurge on big-ticket items in the coming months while opting for BNPL services.
Despite the economic challenges arising due to the pandemic, the BNPL platforms claim that they have witnessed repayment efficiency improved significantly with many customers paying well within their repayment period. The company has also witnessed an improvement of 40 per cent in bounce rates, while NPAs were 34 per cent less severe in Phase II, compared to Phase I of the lockdown.
Lizzie Chapman, CEO and Co-Founder ZestMoney says, “Buy Now Pay Later continues to gain traction as people look for financing options that allow them to manage their expenses better. Strong repayment behaviour indicates things are improving at a micro-level with little impact on jobs and income. Interestingly, Tier II and III markets witnessed stronger revival across parameters. It’s a well-rounded growth across categories from electronics to electric bikes.”
Some of the findings of the survey
- 75 per cent of respondents stated that they were able to manage their finances better this year, compared to Phase I
- 66 per cent were more optimistic about their job prospects and business this year, compared to last year
- 57 per cent stated that their finances were not impacted during Phase II of the lockdown
- 62 per cent respondents indicated that they plan to splurge on big-ticket items, indicating strong demand and a positive consumer sentiment
- Over 53 per cent of respondents had opted for BNPL between April to June 2021