BNPL gross merchandise value will increase to $28.47bn by 2029
The Buy Now Pay Later (BNPL) business is expected to grow steadily over 2024-29, recording a CAGR of 10.7% over six years, says a report by ResearchAndMarkets.
For this year, the BNPL is expected to grow by 16.5% on an annual basis to reach US$17.15 billion, according to the “India Buy Now Pay Later Business and Investment Opportunities” report.
The BNPL gross merchandise value in India will increase from US$14.71 billion in 2023 to reach US$28.47 billion by 2029.
The higher credit demand, among underbanked and underserved consumers, is supporting the uptake of BNPL products.
This trend is projected to continue further in India in 2024. The booming e-commerce sector will also provide growth support to the Indian BNPL market over the medium term.
New entrants in the market are also raising funding rounds to scale their product offerings. While the market is poised for growth, rate hikes, and margin pinch have put BNPL firms in a tough spot.
In Q4 2023, a few of the providers shut down BNPL services due to higher NPAs and growing losses. In the long term, however, the industry is expected to report strong growth due to rising demand and an improving macroeconomic environment.
BNPL startups are raising funds to ramp up technology and drive adoption in India
The credit demand is growing at a rapid rate among consumers in India. The higher inflation and decline in disposable income are driving the credit demand.
Consequently, to reach more consumers, BNPL firms are raising funding rounds from venture capital and private equity firms.
In 2024, more venture capital and private equity funding is expected to enter the BNPL sector in India. This will support innovation and a competitive landscape in the BNPL market over the next three to four years.
The meet the demands of consumers, BNPL firms are targeting more merchant partnerships in the Indian market, said the report.
Simpl, for instance, is planning to onboard 10,000 merchants from the Delhi-NCR region over the next three to four years. The firm, as of June 2023, had over 26,000 merchants and more than 10 million customers registered on the BNPL platform.
In 2024, the report publisher expects this trend to further continue across India. This will subsequently support the growth of the industry, while also driving the competitive landscape over the medium term. Fiinews.com
