Flipkart is in talks with digital lending startups to offer financial products.

Flipkart plans to offer loans insurance products to customers
Atom Ecommerce Friday, June 02, 2017 - 11:53

India’s largest ecommerce player Flipkart is going beyond offering loan access to its sellers. According to a report in the Economic Times, the company is now in talks with some digital lending startups to offer financial products to customers.

It was earlier reported that Flipkart was in talks with banks to offer loans to customers during its Big Billion day sale. But the online marketplace has now created a specific team for financial services and products. A source told ET that Flipkart is keen on being a first mover to launch financial products as a revenue-generating business.

Flipkart currently offers access to loans for its sellers in partnerships with banks and non-banking finance companies (NBFCs). ET reports that apart from Credit and loans, Flipkart is also looking at offering mutual funds and insurance products.

But according to some experts, margins through such tie-ups could be low for Flipkart, but large volumes could make up for that.

Srikanth Meenakshi, cofounder of online investment platform FundsIndia told ET that margins on these products through partnerships could be as low as 1%. But partnerships are pertinent as Flipkart doesn’t have the expertise in this area.

“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,“ he added

Digital lending startups that offer loans, credit and mutual funds products include BankBazaar, EarlySalary, ZestMoney, Finomena and Paisabazaar, among others.

ET also reports that Flipkart’s biggest rival Amazon is also looking at offering financial products, especially since it is already an investor in BankBazaar.

Rival Paytm’s CEO, Vijay Shekhar Sharma had told ET in an interview last month that it is also partnering with lenders and insurance companies to offer financial services to customers. Paytm recently launched its payments bank.

Ecommerce players looking at financial products is not something new. Snapdeal, which Flipkart is acquiring, had partnered with Credila, the education loan arm of HDFC, in 2015 to provide education loans to students through Snapdeal. 

Become a TNM Member for just Rs 999!
You can also support us with a one-time payment.