BNPL expects 54.3% CAGR in 2022-28 and value to increase to $93.51 bn in 2028
The Buy Now Pay Later (BNPL) payment in India is expected to grow by 89.5% on annual basis to reach US$6,927.4 million in 2022, according to a survey released by ResearchAndMarkets on 2 Feb 2022.
Medium to long term growth story of BNPL industry in India remains strong, it added in the “India Buy Now Pay Later Business and Investment Opportunities – Q1 2022 Update”.
The BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 54.3% during 2022-2028.
The BNPL Gross Merchandise Value in the country will increase from US$3,656.3 million in 2021 to reach US$93,509.1 million by 2028.
While the buy now, pay later (BNPL) services have been around for quite some time, it is the global pandemic that has propelled the adoption and growth of the BNPL industry in India. With over a billion consumers and a large credit-averse population, BNPL is expected to disrupt the payments sector in India.
In the midst of the growing demand for BNPL products from both merchants and consumers, the publisher expects BNPL firms to aggressively raise fresh capital for expanding their services across the country.
Moreover, as the BNPL market in India continues to record strong growth over the next few quarters, it is expected that more global firms to expand their footprint in the country. This will subsequently lead to more strategic partnerships and mergers and acquisitions deals from the short to medium-term perspective.
BNPL disbursals grow more than 100% during the festival season in India
Over the last four to eight quarters, BNPL platforms have experienced accelerated growth on the basis of widespread adoption.
However, the market got a further boost during the festival season in the country, wherein several BNPL platforms reported over 100% growth in disbursals during Diwali 2021, compared to the year before.
For instance, LazyPay, the BNPL product owned by PayU, experienced a credit demand increase of 300% over the last festive season in India. The firm mainly experienced demand in segments such as food and beverages, travel, and entertainment.
Leading to November 2021, the firm also had an uptick of 70% in user acquisition over the last two months. With the firm facilitating five million transactions every month through its platform in 2021, LazyPay targets to acquire two million new consumers by the end of 2022.
Global firms are entering the Indian BNPL market through strategic investments, noted the report.
Given the high-growth potential of the Indian BNPL segment from the short to medium-term perspective, global firms are entering the market through strategic investment in local firms. For instance,
In September 2021, Australian BNPL firm Zip announced that it is investing US$50 million to acquire a minority stake in local BNPL brand ZestMoney.
The strategic investment from Zip in ZestMoney is part of the company’s expansion plan in new markets. The company has its presence in 12 markets across five continents.
ZestMoney is expected to use the funding round to expand its product portfolio, expand its merchant network, and launch new business lines, including savings and insurance.
BNPL startups are raising funds to expand their market share in India, according to the report.
The majority of BNPL startups operating in the Indian market has experienced significant growth over the last year. With the market expected to record strong growth over the next few quarters, BNPL platforms are raising funds to expand and capitalize on the high-growth potential industry. For instance,
In December 2021, Simpl, one of the leading BNPL platforms in India, announced that the firm had raised US$40 million in its Series B funding round. The firm is planning to use the newly infused capital to expand its BNPL offering across the country to further accelerate its growth.
Moreover, the firm has grown its monthly active users and merchants by tenfold over the last 18 months. Currently, it has partnered with over 7,000 digital retailers, including Big Basket, Jio, 1MG, Crocs and Zomato.
Key Players are: Simpl, ZestMoney, LazyPay, Capital Float, PineLabs, Paytm Postpaid, OlaMoney Postpaid, Amazon Pay Later and Flipkart Pay Later among others. fiinews.com
