The popular online shopping giant Flipkart is in discussion with a grasp of digital lending startups to present financial products, according to three people aware of the development. According to ET reports last year, that Flipkart was in talks with the banks to present 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.
However, Flipkart chose not to comment on precise 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.
As per Avasarala's LinkedIn profile it says that she has "launched the 'No Cost EMI' product (creating a marketplace of lenders, brands, and consumers) on Flipkart to make 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".
The online giant already offers a great access to loans to sellers on its platform in partnerships with banks and non-banking finance companies (NBFCs). Last year, it got united with Axis Bank to start on a credit card with discount profit. Apart from the credit and loans, Flipkart is also vouching at mutual funds and insurance products, one of the executives said. However, as per some experts 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. Well that’s not all, there is also a buzz that more than a few e-commerce companies are also looking to venture 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 are 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." However, Singh did not reveal the names of companies. Few of the most important digital lending startups that present personal loans, credit, EMI and mutual funds products include BankBazaar, EarlySalary , ZestMoney , Finomena and Paisabazaar, among others. While some of 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.