Fashion Emerges as a Top BNPL Category in India in 2021, Sees 2.3X Increase in Transactions

BNPL emerged as the preferred option for people across age groups with the youngest customer being 18 years old and the oldest at 66
Fashion Emerges as a Top BNPL Category in India in 2021, Sees 2.3X Increase in Transactions 

The fashion and lifestyle category has turned out to be one of the top two segments for direct-to-consumer (D2C) brands that enabled BNPL as a payment method at the checkout.

The demand in fashion and lifestyle was also led by men and women in Tier-I and Tier-II cities. While men in Tier-I cities spruced up their wardrobes and spent heavily on fashion, their women counterparts upgraded their tech and electronics while also indulging in fashion and lifestyle retail therapy. In Tier-II too, men took to spending on fashion and lifestyle, besides travel, while women spent on EdTech courses and upskilling besides electronics and fashion, according to a report by Fintech platform ZestMoney.

While most of the customers (median) were in the 23-26 years group, BNPL emerged as the preferred option for people across age groups with the youngest customer being 18 years old and the oldest at 66. The number of millennial and GenZ customer base increased by 2X and 3X respectively, indicating that the BNPL segment has been driven by young cohorts in India in line with the global trend.

zest data

READ MORE: How India's 'Buy Now, Pay Later' Segment Poised to Reach $56 bn by FY26

Also, Bangalore, Mumbai, New Delhi, Pune, Hyderabad, Chennai, Ahmedabad, Thane, Kolkata, and Jaipur emerged as the top cities witnessing demand for BNPLin 2021, while Lucknow, Kanchipuram, Vijayawada, Visakhapatnam, Guntur, Surat, Indore, Bhopal, Tiruvallur, and Coimbatore were the other top Tier-II and Tier-III cities.

Lizzie Chapman, CEO & Co-founder, ZestMoney said, ‘2021 was an intense year, with the volatility of the pandemic coupled with its impact on the consumer we serve - from pain to recovery and then rapid demand acceleration over the last two quarters. Customers continued to lap up Pay Later because it gives them the perfect flexibility to spread out costs and plan their finances better. We've doubled our user base in the last 12 months taking our total registered user base to 15 million – almost 2X growth. It's been a well-rounded growth across categories from smartphones, electronics, travel, fashion and lifestyle, and home decor emerging as the top categories on the platform.”

zest data

“We not only added the highest number of new customers and merchants but also gained market share in an ever-growing market.   We saw a 300 percent YoY growth in BNPL transactions as people took to convenience and affordability in a big way. Owing to the solid consumer demand we saw last year, we now have a 50 percent market share in the Indian BNPL market and over 70 percent market share in the online ‘Pay in 3’ no-cost interest-free offering. On the back of the strong demand and our expansion plans, we are confident of hitting a $10 billion GMV run rate in the next 3 years and cementing our position as the market leader in the country.”  Chapman further added.

zest dataDuring the festive season last year, customer applications for BNPL went up by 10X with top categories being Smartphones, electronics, large appliances, fashion, furniture, and home decor. ZestMoney witnessed a 200 percent growth in transactions on Amazon, Flipkart, and Myntra compared to last year. While physical stores observed growth of 100 percent during the festive season compared to 2020.

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