Flipkart Financial Services Program offers Personal Loans
Reports Indicate that Flipkart, Walmart’s subsidiary, is Set to Venture into the Lending Sector, Competing Against Amazon for India’s Consumer Market.
According to a recent article by The Arc, an Indian news outlet, Flipkart has initiated its loan offerings to customers through a collaboration with Axis Bank. The report, which relies on undisclosed sources, states that Flipkart has applied for a non-bank financial company (NBFC) license.
Additionally, The Arc report highlights that Flipkart has outpaced PhonePe, a payments company backed by Walmart, in entering the personal lending arena. PhonePe was previously associated with Flipkart until their separation last year.
The report from The Arc suggests that while numerous Indian startups provide personal loans, Flipkart holds a potential advantage due to its extensive user base exceeding 300 million individuals and access to their shopping data. With most of these customers hailing from small towns, the report speculates that familiarity could sway them to choose Flipkart over competing companies.
PYMNTS contacted Flipkart for comment; however, a response still needs to be received at the reporting time.
This development coincides with the efforts of Walmart and its competitor Amazon to capitalize on India’s rapidly expanding economy and boost their sales figures.
Just recently, Amazon revealed its intention to invest $26 billion in India by 2030, building upon previous commitments of a $12.9 billion investment by Amazon Web Services and a $6.5 billion investment to enhance its eCommerce operations in the country.
According to a PYMNTS report, Walmart has surged ahead of Amazon regarding eCommerce sales in India, with Flipkart’s pivotal role capturing an impressive 48% market share.
Earlier this year, Walmart announced the remarkable growth of Flipkart’s discounted resale product app, Shopsy, which has expanded in terms of user base and geographical reach across India. Over the past year, Shopsy has witnessed a threefold increase in units, customers, and sellers, while boasting an impressive 175 million downloads.
To achieve its ambitious target of doubling its overseas gross merchandise volume to $200 billion within five years, Walmart relies on the collective strength of Flipkart and PhonePe. These two entities are expected to contribute significantly towards realizing Walmart’s growth objectives.
“At a June investors conference, John David Rainey, the company’s finance chief, expressed optimism about the potential for both businesses to reach a market valuation of $100 billion in the future.”
Research conducted by PYMNTS has determined that one of the two companies is leading the race for online shoppers.
“PYMNTS noted last month that Amazon dominates the eCommerce landscape, accounting for approximately 48% of U.S. retail spending, while Walmart’s share is 7%. This establishes Amazon as the reigning champion in the eCommerce industry.”
Despite Amazon’s significant lead, recent data suggests that Walmart is actively pursuing a share of Amazon’s digital sales. During a recent earnings call, Walmart’s management highlighted a notable growth of 27% in comparable eCommerce sales gains, amounting to $16.9 billion in sales during the first quarter of 2023.
In conclusion, the reports indicating Flipkart’s entry into the lending sector and its competition with Amazon for India’s consumer market highlight the intensifying battle between the two retail giants. Flipkart’s collaboration with Axis Bank to offer personal loans and application for an NBFC license demonstrates its ambition to tap into the lucrative lending market. With its vast user base and access to shopping data, Flipkart has a potential advantage, particularly among customers in small towns. This move aligns with Walmart’s broader strategy of leveraging Flipkart’s success to boost its sales figures and compete with Amazon in India. While Amazon dominates the eCommerce landscape, Walmart is actively pursuing a share of the digital sales market and has shown promising growth in comparable eCommerce sales. The rivalry between Flipkart and Amazon in India’s consumer market is expected to intensify as both companies strive for dominance and market valuation.
