E-commerce platforms Amazon and Flipkart have reportedly seen a rise in digital transactions in October. Around 60% of the consumers used one or other digital payment mode to purchase products online, rather than the traditional Cash On Delivery option, Economic Times reports.
Ahead of COVID-19 social distancing norms, numerous businesses abandoned their cash on delivery services for fintech payment options. Reports showed that the Cash on Delivery orders on e-commerce shipment had fallen drastically in India in August and September, as opposed to its dominance in payment options before the pandemic. Simultaneously, digital payments through Unified Payment Interface (UPI), e-wallets and internet banking soared high.
The e-commerce giants started gearing up for the festive season with expectations of booming sales. Flipkart and Amazon partnered up with numerous fintech and credit products to make purchasing more affordable for its customers.
Flipkart’s Big Billion Day Sale
Flipkart’s Big Billion Day Sale from 16th to 21st October recorded about 250 million consumers, with 10 million shipments in the five-day event. The e-commerce business had set-up multiple payment options with exciting offers to attract its consumers towards online transactions with 17 banks offering debit card EMIs, NBFCs for no-cost EMI solutions and promoting its buy now, pay later options. The company also targeted Tier-2 and Tier-3 cities for an inclusive festive sale. Flipkart reports a 55% rise in digital payment transactions in the platform with a 1.6x rise in customer savings through banks and e-wallet offers.
Previously, Flipkart had announced its partnership with Paytm, offering value to its customers through assured cashback on UPI and e-wallet transactions as well as faster checkouts during the sale. This enabled small-value purchases to have three times higher adoption in the dominant cash categories like lifestyle and beauty merchandises, home, mobile accessories etc.
Moreover, the firm pushed its partnered financial institutions to increase the eligible customer base on pre-approved EMI credit options, including Flipkart Pay Later, so that the buyers could avail credit easily on the e-commerce platform. The Pay Later saw seven times higher spends by its customers while EMIs showed 1.7 times higher adoption rate during the sale.
The Flipkart Axis Bank co-branded credit card witnessed five times surge in adoption from the previous year while the Electronic Gift Vouchers (EGVs) capped a 40% jump in its usage, beating Amazon in the competition.
Amazon Great Indian Festival
The Amazon Great Indian Festival recorded 1.5 million customers at its annual event, with 91% of them from non-metro cities. Earlier reports had shown Amazon infusing about Rs 700 crore into its payments unit Amazon Pay ahead of its sale. To compete with its e-commerce rival Flipkart, the company was reported to have its own share of fintech and credit partners.
With its affordable EMI offers, Amazon accounted Rs 600 crore worth of credit was disbursed during Prime Early Access. Vikas Bansal, Director, Amazon Pay told LiveMint that Amazon had ramped up their coverage of EMI-based credit products for its customers ahead of the sale. Amazon also made use of its Amazon Pay Later, which has offered more than 10 lakh loans ever since its launch in April. No-cost EMIs account for two-thirds of all the EMI purchases on Amazon.
Amazon partnered with 24 banks in the festive season to provide affordable shopping for its customers. Tier 2 and Tier-3 cities contributed to EMI-based shopping. Amazon had previously said that Debit card-EMI would be a critical product to target to these cities. The company had extended its insurance to gadgets and home appliances, providing statistics that more than 3.5 lakh phones, as well as 1 out of 3 ACs and refrigerators, were bought on EMI.
On Sunday, NPCI announced its digital payment interface UPI had crossed the 2 billion transaction mark in October. Amazon had also established many offers on Amazon Pay UPI and e-wallet transactions, among others, during the sale. UPI-based transactions tend to dominate the digital e-commerce payments in India for smaller-value transactions. Hence, the e-commerce giants did not miss the mark in targeting every digital payment mode for their flagships.