Flipkart will Now Sell Financial Services and Products

Online marketplace Flipkart is in talks with a clutch of digital lending startups to offer financial products, according to three people aware of the development. The Bengaluru-headquartered company has created a focused team for financial services and products, they said. ET had reported in August last year that Flipkart was in talks with banks to offer loan products to customers, especially during its 'Big Billion Day' sale.

“While several e-commerce companies are looking at financial products, Flipkart is leading the pack and is keen to launch this as a revenue-generating business and also to help its customers,“ one of the persons cited earlier said. Flipkart declined to comment on specific queries. One of the persons cited earlier said, these startups are in talks with Flipkart executives including Monomita Roy Avasarala, lead product manager for fintech and consumer credit products at Flipkart. Vasarala's LinkedIn profile says she “launched the `No Cost EMI' product (creating a marketplace of lenders, brands, and consumers) on Flipkart to drive affordability and increase sales of high-ticket- size items“ and that she is also “working to extend credit and convenience features to a larger customer base with innovations such as 'Flipkart Pay Later', and is leveraging machine learning algorithms to build the next generation of credit products“.

Flipkart already offers access to loans to sellers on its platform in partnerships with banks and non-banking finance companies (NBFCs). Last year, it tied up with Axis Bank to launch a credit card with discount benefits. Apart from credit and loans, Flipkart is also looking at mutual funds and insurance products, one of the executives said. However, some experts said the margins through such tie-ups could be low for Flipkart, but the company can make up through large volumes.

“The margins for Flipkart on products like mutual funds through partnerships could be as low as 1%. But the fact is that Flipkart does not have the expertise in this area, which is why they will need to partner with these platforms. The advantage for them will be that products like mutual funds are sticky products, and the platform can become a one-stop place for its customers,“ said Srikanth Meenakshi, co-founder of online investment platform FundsIndia. Several e-commerce companies are looking to foray into the lending side, according to industry executives.

Manavjeet Singh, CEO of lending platform Rubique, said: “We are talking to multiple ecommerce players who are looking to launch financial products. Since financial products is not their core area, they are looking to integrate with players like us who have multiple banking and NBFC partners and offer nearly 200 products.“ Singh did not disclose the names of companies.

Some of the leading digital lending startups that offer personal loans, credit, EMI and mutual funds products include BankBazaar, EarlySalary , ZestMoney , Finomena and Paisabazaar, among others. Some executives said Flipkart's biggest rival Amazon could also start offering financial products, especially since it is already an investor in financial products platform BankBazaar.

Paytm, which recently launched its payments bank, is set to partner with various lenders and insurance companies to offer financial services to customers, CEO Vijay Shekhar Sharma had told ET in an interview last month.

Snapdeal had, in 2015, partnered with Credila, the education loan arm of HDFC, to provide education loans to students through its platform and had also invested in financial services portal Rupeepower.