In line with its plan for a mega showdown in the upcoming festival season, Flipkart has launched an instant credit line of up to Rs 60,000 to its customers. Its rival Amazon India announced the credit line of Rs 60,000 on Wednesday only. The instant credit facility is a part of Flipkart's strategy to drive its gross merchandise volume by "15-20 per cent" by launching affordability instruments in the next 24 months. According to Flipkart, this will make the shopping experience more inclusive.
It had previously launched affordability instruments like no-cost EMI, debit card EMIs, buy back options, and exchange offers to its customers. The latest 'Cardless Credit' service gives customers an option to get credit up to Rs 60,000, and payback full amount later or through EMI. The credit line is decided using transaction data, your shopping history, and data from other places. For now, you will be able to use a credit line on Flipkart only.
"Close to 45 million customers on our platform do not have formal access to credit and a good portion of this is emerging from tier II, III towns," said Ravi Garikipati, senior vice president and head of Fintech Flipkart told the Economic Times, adding that will help customers with a small credit line.
The festive season around Diwali brings bumper sales to customers, and it also brings a huge opportunity for online companies as well as offline stores to boost sales. Flipkart is aiming at achieving 50 per cent of all smartphone sales during the upcoming festive month. It has pumped in Rs 3,463 crore into its online marketplace, Flipkart Internet. This is the biggest capital infusion by the Walmart-backed e-commerce giant ever since the US-based retail behemoth acquired a majority stake in the company.
As per market research firm Redseer, Diwali is a big driver of sales and accounts for over 10 per cent of all e-commerce revenue in India. With an online population of 500 million in 2017, India has one of the fastest growing Internet population in the world. "The number of online shoppers which is currently pegged at 50 million is expected to grow at a CAGR of 28% to reach the 120 million marker by 2020," its report said.
Meanwhile, Flipkart employees are going to gain big from their stock options as the Walmart-backed company has allowed its staff to liquidate their employee stock ownership plans (ESOPs) at $126-128 per unit. The company signed a $16 billion merger deal with US retail company Walmart in May at a valuation of $20 billion. Now Walmart will buy ESOPs worth over $800 million, and many current and former employees are looking forward to a windfall.
Edited by Manoj Sharma