Smartphones, Electronics, Fashion, and Travel drove the demand for BNPL in 2021, according to the findings of a recent report. ZestMoney, a Buy Now, Pay Later platform, came out with its annual BNPL report, which shows the top consumer preferences, categories driving demand, adoption of BNPL by merchants and highlights triggers for the shift in consumer behaviour.
‘The India Buy Now, Pay Later Report 2021’ by ZestMoney gives an overview of the Indian BNPL ecosystem, global best practices, and the way forward for the industry in India, along with revealing consumer preferences and how Indian states took to BNPL.
The report shares insights such as while most of the customers (median) were in the 23-26 years group, BNPL emerged as the preferred option for people across age groups with the youngest customer being 18 years old and the oldest at 66. The number of millennial and GenZ customer base increased by 2X and 3X respectively, indicating that the BNPL segment has been driven by young cohorts in India in line with the global trend.
The company claims that it witnessed a massive 300 per cent increase in overall BNPL transactions in 2021 compared to 2020.
The report also revealed insights on what men and women shopped for across the country. For instance, while men from Tier 1 and 2 cities spent heavily on fashion and lifestyle, women from Tier 1 and 2 cities spent on upgrading their electronics and EdTech courses for upskilling, respectively.
Bangalore, Mumbai, New Delhi, Pune, Hyderabad, Chennai, Ahmedabad, Thane, Kolkata, and Jaipur emerged as the top cities witnessing demand for BNPL in 2021, while Lucknow, Kanchipuram, Vijayawada, Visakhapatnam, Guntur, Surat, Indore, Bhopal, Tiruvallur, and Coimbatore were the other top tier-II and tier-III cities on the platform.
Lizzie Chapman, CEO and Co-founder of ZestMoney says, “2021 was an intense year, with the volatility of the pandemic coupled with its impact on the consumer- from pain to recovery and then rapid demand acceleration over the last two quarters. Customers continued to lap up Pay Later because it gives them the perfect flexibility to spread out costs and plan their finances better. It’s been a well-rounded growth across categories from smartphones, electronics, fashion, and home decor emerging as the top categories on the platform.”
The company says, direct to consumer (DTC) brands took to enabling BNPL at checkout as they saw an increase in sales and average order value. While DTC brands in Fashion, Beauty, and Skincare topped the demand for BNPL, Electronics, Home and Decor, and Travel were the other major categories, according to the report.
During the festive season, customer applications for BNPL went up by 10X with top categories being Smartphones, electronics, large appliances, fashion, furniture, and home decor. The company further claims that they witnessed a 200 per cent growth in transactions on Amazon, Flipkart, and Myntra compared to last year. While physical stores observed growth of 100 per cent during the festive season compared to 2020.
The report also highlights the importance of collaboration between banks and fintech to scale the adoption of BNPL and drive financial inclusion in the country.