Home / News / India /  Millennials, GenZ drove demand for Buy Now, Pay Later in 2021: Report
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Buy Now, Pay Later (BNPL) emerged as the preferred option for people across age groups in 2021, with the youngest customer being 18-year old and the oldest 66, as per a survey by ZestMoney, a BNPL platform. 

The report decodes the top consumer preferences, categories driving demand, adoption of BNPL by merchants and highlights triggers for shift in consumer behaviour. Besides revealing consumer preferences, ‘The India Buy Now, Pay Later Report 2021’ also gives an overview of the Indian BNPL ecosystem, global best practices, and the way forward for the industry in India.

While most of the customers were in the 23-26 years group, BNPL emerged as the preferred option for people in 2021. The number of millennial and GenZ customer base increased 2X and 3X respectively, indicating that the BNPL segment has been driven by young cohorts in India in line with the global trend.

The overall BNPL transactions on ZestMoney jumped a massive 300% in 2021 compared to 2020.

The report found that while men from Tier 1 and 2 cities spent heavily on fashion and lifestyle, women from Tier 1 and 2 cities spent on upgrading their electronics and edtech courses for upskilling, respectively.

Bengaluru, Mumbai, New Delhi, Pune, Hyderabad, Chennai, Ahmedabad, Thane, Kolkata, and Jaipur emerged as the top cities witnessing demand for BNPL in 2021, while Lucknow, Kanchipuram, Vijayawada, Visakhapatnam, Guntur, Surat, Indore, Bhopal, Tiruvallur, and Coimbatore were the other top tier-II and tier-III cities on the platform.

Lizzie Chapman, CEO & Co-founder of 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 MN – almost 2X growth. It's been a well-rounded growth across categories from smartphones, electronics, fashion, and home decor emerging as the top categories on the platform."

ZestMoney 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% 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% market share in the Indian BNPL market and over 70% 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 BN GMV run rate in the next 3 years and cementing our position as the market leader in the country," added Lizzie Chapman.

Direct to consumer (DTC) brands took to enabling BNPL at checkout as they saw an increase in sales and average order value. ZestMoney saw a 10X YoY growth in the number D2C merchants on its platform indicating the popularity of the BNPL option among them. While DTC brands in fashion, beauty, and skincare topped the demand for BNPL, electronics, home & decor, and travel were the other major categories.

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

The report also highlights the importance of collaboration between banks and fintechs to scale the adoption of BNPL and drive financial inclusion in the country. ZestMoney said it partners with 25 leading banks and NBFCs to service demand from customers.


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