India Buy Now Pay Later Business and Investment Opportunities Databook – 75+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics - Q2 2024 Update

India Buy Now Pay Later Business and Investment Opportunities Databook – 75+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics - Q2 2024 Update

According to PayNXT360, BNPL payments in the country are expected to grow by 16.0% on an annual basis to reach US$19,362.8 million in 2024.

The medium to long-term growth story of the BNPL industry in the country remains strong. BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 10.8% during 2024-2029. The BNPL gross merchandise value in the country will increase from US$16,696.3 million in 2023 to reach US$32,335.0 million by 2029.The BNPL industry is expected to grow at a steady pace over the medium term in India. 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 funding rounds 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.

• SalarySe, the BNPL-focused financial services app, announced that the firm had raised US$5.25 million in a funding round in January 2024. The capital round was led by Surge Ventures and included participation from other investors like Pravega Ventures. The firm is planning to use the capital for ramping up its technology, while also targeting higher adoption of its product in the Indian market.
• Going forward, SalarySe is also aiming to launch a credit-on-UPI system for salaried employees. Consequently, the firm is entering into strategic collaborations with banking institutions, HR SaaS platforms, and employers. Notably, the National Payments Corporation of India (NPCI), launched the credit line on UPI facility in 2023 in India.
In 2024, PayNXT360 expects more venture capital and private equity funding 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.

Rate hikes, margin pinch, and higher NPAs resulted in the downfall of BNPL firms in India

To combat the rising inflation, central banks have announced a series of rate hikes in 2023. This, in turn, resulted in a margin pinch for BNPL providers, which were once thriving in a low interest rate environment. Higher inflation also meant that consumer disposable income declined, resulting in higher borrowings and subsequently higher NPAs for BNPL providers. As a result, a few of the firms had to shut down their operations in the Indian market in Q4 2023.
• PayU India, for instance, made a decision to shut its BNPL prepaid card service LazyCard in November 2023. This is part of the firm's strategy to reduce losses while enhancing the overall business profitability. Notably, the firm launched the BNPL service in 2022.
• Zest Money, which was one of the leading BNPL firms in India, also closed operations in December 2023. The firm got stuck in a financial mess because it had too many bad loans, struggled to collect money effectively, and had a flawed business strategy. The firm, notably, was once valued at US$450 million in the Indian BNPL market.
While the macroeconomic environment is projected to improve over the medium term, the outlook for the sector remains bleak in the short term. Consequently, PayNXT360 expects providers to remain under pressure in Q1 2024.

BNPL platforms are looking to onboard an increasing number of merchants to drive growth

The meet the demands of consumers, BNPL firms are targeting more merchant partnerships in the Indian market. Simpl, for instance, announced that the firm 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, PayNXT360 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.

The BNPL payment industry in India has recorded strong growth over the last four quarters, supported by increased e-commerce penetration.

This report provides a detailed data-centric analysis of the Buy Now Pay Later (BNPL) industry, covering market opportunities and risks across a range of retail categories. With over 75 KPIs at the country level, this report provides a comprehensive understanding of BNPL market dynamics, market size and forecast, and market share statistics.

It breaks down market opportunities by type of business model, sales channels (offline and online), and distribution models. In addition, it provides a snapshot of consumer behaviour and retail spending dynamics. KPIs in both value and volume terms help in getting an in-depth understanding of end market dynamics.

PayNXT360’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.