Tag: xiaomi

ZestMoney raises USD 50 mn funding from Zip Co, BFSI News, ET BFSI

Personal Finance

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ZestMoney, which offers Buy Now Pay Later (BNPL) platform, on Wednesday said it has raised USD 50 million (about Rs 369 crore) from global BNPL provider Zip Co Ltd. This is part of a larger series C fundraise that will see participation from existing investors, a statement said.

Zip will acquire a minority shareholding in the company and a board seat as part of the investment, it added.

ZestMoney plans to deploy the funds to expand the product suite, deepen the transaction network, strengthen its balance sheet capacity and launch new business lines in insurance and savings, the statement said.

The company has raised USD 120 million till date from investors including Ribbit, Goldman Sachs, Quona Capital and Xiaomi.

Zip – which was founded in Australia in 2013 – has a presence in 12 markets across five continents, serving more than 7.3 million customers and over 51,000 merchants.

Founded by Lizzie Chapman, Priya Sharma and Ashish Anantharaman in 2015, ZestMoney allows customers to pay for products over time. Increasing smartphone penetration, cheapest data plans in the world and boom in online shopping has propelled the demand for BNPL offerings in the country.

ZestMoney offers the entire spectrum of BNPL offering from 30 days to 24 months and ticket sizes ranging from Rs 50 to Rs 5 lakh. The digital omnichannel BNPL player allows customers to transact at over 10,000 online sites and 75,000 physical stores across the country. It has 11 million registered users.

Smartphones, large appliances, fashion, travel, home decor, ed-tech are the largest categories on the platform. Electric bikes, ayurveda products, and personal care are popular among customers using the pay later option.

ZestMoney partners with 25 banks and NBFCs to power BNPL transactions for consumers across the country.

“We are thrilled to have Zip come onboard for the next phase in our journey of powering affordability in the lives of Indian consumers. This is a deep validation of our position as market leader in the Buy Now Pay Later category in India,” ZestMoney CEO and co-founder Lizzie Chapman said.

The shift towards pay later solutions is a global phenomenon and represents young digital consumers looking for transparency, honesty and no hidden charges in financial products, Chapman added.

“We believe India will leapfrog traditional products like credit cards, along with many other emerging markets, going straight to digital payment solutions. Over the last year we have seen applications for BNPL go up by 5X on our platform. We continue to invest in deepening partnerships with our merchant network and hiring the best talent,” she said.

ZestMoney strongly believes that India will emerge as the largest BNPL market in the world over the next five years, she added.

Larry Diamond, CEO of Zip Co, said while BNPL is emerging as a preferred mode of payment globally, in India it also plays a crucial role in driving access to credit.

“With deep partnerships with online and offline merchants and lending partners, Zest Money is poised to accelerate growth as the market develops. We have been incredibly impressed with the founders and leadership team and look forward to the next stage of the ZestMoney journey,” he added.

ZestMoney recently secured the Corporate Agent licence from Insurance Regulatory and Development Authority of India (IRDAI) allowing it to offer and enable insurance products to users on its platform.



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Facebook, Xiaomi target India’s $1 trillion digital loan market

Banking & Finance

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India’s digital loan market is becoming a battleground for companies from Facebook Inc. to Xiaomi Corp., as they seek a foothold in what’s set to be a $1 trillion industry.

Facebook this month said India would be the first country where it rolls out its small business loan programme offering loans via a partner to firms that advertise on its platform. The loans will range from ₹500,000($6,720) to ₹5 million with interest rates of 17%-20%, potentially without collateral.

The social media giant’s foray into India coincides with Xiaomi’s, the Chinese maker of everything from rice cookers to gaming monitors, plans to offer loans, credit cards and insurance products in partnership with some of the nation’s biggest banks and start-up digital lenders, the Press Trust of India reported, citing local head Manu Jain.

Amazon.com also made its maiden investment in the country’s wealth management sector this month, participating in a $40 million round by fintech start-up Smallcase Technologies Pvt.

Also read: FB ties-up with Indifi for small business loans initiative

Alphabet Inc.’s Google is also upping its game. After offering wealth management products such as digital gold, mutual funds on its popular Google Pay platform, it’s now tied up with small Indian lenders for opening time deposits for its customers.

Digital lending growing

India’s digital payments market is drawing the attention of some of techs biggest names after online transactions surged during the pandemic and traditional lenders turned cautious following a rise in bad debt. Digital lending is expected to treble to $350 billion by 2023 and reach a total of $1 trillion in the five years since 2019, according to estimates from the Boston Consulting Group.

“The payment business hardly makes any money, but lending makes a lot of money,” said Saurabh Tripathi, Managing Director and senior partner at BCG’s financial institutions practice. “Indian consumers are waiting for more appropriately designed digital experiences and many players are jumping at this opportunity.”

While the potential of India’s loan market is significant, so too are its risks. The nation’s bad loan ratio is expected to rise to 11.3% by March making it the worst performer among major countries for a second consecutive year.

As well as addressing loan collections by digital firms, the Reserve Bank of India is also planning to regulate online lenders, which include more than 300 start-ups.

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Ezetap, BFSI News, ET BFSI

Personal Finance

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Customers are increasingly preferring to pay through EMIs while buying high-value consumer items, as affordability has become a key factor in the post-pandemic scenario, payments solution provider Ezetap said on Thursday. Buying ability of consumers across the country has been significantly reduced due to the pandemic. They are either avoiding a single big payment or entirely skipping to buy any new item, Ezetap said.

This has impacted sales across brands and created a vast need for affordable solutions for customers across different sectors.

Ezetap has recorded a steep increase of 220 per cent in the transactional volume of equated monthly instalments (EMI) in July 2021, compared to February 2020. EMI volume as part of total transactions has increased to 18 per cent in the mobile and consumer durables segment, compared to 9 per cent in the pre-pandemic period of March 2020, it said.

“This indicates a growing inclination of consumers towards affordability solutions, which help increase their purchasing power. This also indicates that EMI or affordability presents a massive opportunity for brands to grow their sales across diverse product segments,” it added.

Delhi led metro cities with an increase of 258 per cent in total EMI volume followed by Bengaluru, clocking a growth of 206 per cent.

There has been a significant increase in the adoption of EMI transactions in non-metro cities with a combined contribution of 59 per cent in the total EMI volumes. Ahmedabad and Pune registered growth figures of 230 per cent and 210 per cent, respectively.

“This shows that affordability solutions play a positive role in impacting sales…This may be partially attributed to the fact that a large portion of the working population have moved back to their hometowns due to work from home models, and have contributed to EMI sales in their respective hometowns” it added.

According to Ezetap, a surge in debit card EMIs is one of the main reasons behind the steep increase in such transactions and it has increased significantly with nearly 25 per cent contribution in the total EMI volumes.

Through a tie-up with several banks, Ezetap offers instant EMIs via credit and debit card. The average ticket size of EMI transactions recorded by Ezetap has increased from Rs 18,000 in February 2020, to Rs 32,000 in July 2021.

In a move to expand the benefits of EMIs, Ezetap has also tied up with ZestMoney to provide NBFC EMIs.

Another factor for large-scale uptake of EMIs is no-cost EMIs and vouchers available to customers by various brands. Nearly 50 per cent of Ezetap EMI transaction volume can be attributed to no-cost brand EMIs, it said.

On the mobile and consumer durable space, there is at least one card offer being rolled out by various brands to drive more sales. Ezetap has also partnered with Xiaomi to provide EMIs to customers.

Customers are avoiding bulk payments and preferring affordable payment options to reduce the monetary burden, and some non-metro cities have growth of over 200 per cent in EMI transactions, Byas Nambisan, CEO, Ezetap, said.

“We have been able to reduce the transaction time by nearly 80 per cent and eliminate the manual errors with EMI integrated into the merchant’s billing POS. We will continue our efforts to provide the retail businesses with robust and integrated Buy Now Pay Later solutions, like EMIs, to improve the purchasing power of their end customers,” he said.

Ezetap has forged tie-ups with banks such as Axis Bank, HDFC Bank, Citibank, State Bank of India, American Express, Yes Bank and ICICI Bank. PTI KPM KPM BAL BAL



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How Oppo, Xiaomi are leveraging huge customer base to become a financial one-stop shop, BFSI News, ET BFSI

Personal Finance

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It’s not just telecom service providers and social media companies that are looking to leverage their huge data trove to offer credit to customers.

Handset vendors such as Xiaomi and Oppo have entered the financial services market.

They are looking to leverage on their huge customer base who they can offer bundled in credit apps in handsets and via their own app stores.

Xiaomi plans

Xiaomi is bringing in offerings like gold loans, credit line cards and insurance products as it looks to provide the full spectrum of financial services across payment, lending and insurance in India. These financial services will be offered in partnership with organisations like Axis Bank, IDFC Bank, Aditya Birla Finance Ltd, Stashfin, Money View, Early Salary and Credit Vidya.

Mi Credit, a curated marketplace for personal loans of up to Rs 1 lakh, in 2019 witnessed a lot of euphoria, and more than one lakh loans have already been disbursed, Manu Jain, Xiaomi India head said.

However, as the pandemic hit, its lending partners took a backseat.

“Many quarters went into re-thinking about the future of Mi Credit or Mi Financial Services should look like. We are now back to growing this particular platform. Q1 2021 versus Q4 2020, we grew 95 per cent, and Q1 2021 versus Q1 2020, we saw 35 per cent growth,” he said.

Jain highlighted that the company is working on building a full spectrum platform with respect to overall financial services as well as credit perspective.

He said Xiaomi is adding insurance vertical to its platform as well as expanding lending category with the addition of offerings like gold loans and credit line cards.

Mi Credit will now offer a higher pre-approved loan of Rs 25 lakh (against Rs 1 lakh previously) and tenure of up to 60 months.

Besides, the company has started offering SME Loans and credit line cards as well.

Mi Credit, in partnership with Stashfin, has launched Credit Line cards.

“It is a unique product that comes with a proposition of Buy Now Pay Later combined with personal loan in order to enable the customer to utilise the offering across channels without any limitations,” Xiaomi India Financial Services Head Ashish Khandelwal said.

Gold loans

Another service that will be launched in the next few weeks is gold loan, he added.

Jain said 40 per cent of the company’s credit product users are self-employed and the remaining 60 per cent are salaried employees.

“In 2021, we are planning to further diversify and provide 20 per cent of the loans to MSMEs (micro, small and medium enterprises). We have launched business loan to meet the emerging needs of entrepreneurs and MSMEs,” he added.

Xiaomi’s Mi Pay service, which was launched in 2018, had touched 20 million registered users in a year’s time. This number has now crossed 50 million users.

Xiaomi has partnered with ICICI Lombard to curate a health insurance product.

This was piloted in July, and will continue to be offered.

Xiaomi also has a cyber insurance offering, and more than 25,000 customers have been covered so far.

Oppo
How Oppo, Xiaomi are leveraging huge customer base to become a financial one-stop shop

Chinese mobile communications company Oppo launched its financial services arm Oppo Kash in 2020. Oppo Kash aims to six offerings including payments, lending, savings, insurance, financial education and for the first time in India a financial well being score.

The company was aiming to have 10 million customers in the next five years with Assets Under Management (AUM) of Rs 50,000 crore.

Users of Oppo Kash will also be entitled to free credit reports, personal loans upto Rs 2 lakh, business loans upto Rs 2 crore and screen insurance.

Oppo Kash comes in the form of a mobile app and is available in Google Play Store and Oppo App Store. It will come pre-installed in all Oppo smartphones. The mobile company has partnered with 20 financial companies to power this platform.

The mobile communications firm has also set up a customer service team that would help users invest in mutual funds, take loans or solve any other queries.

The customer servicing team has been trained in multiple Indian languages to cater to India’s regional customer segment.

The firm’s financial arm was launched along side its new smartphone Oppo Reno 3 at the event.



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