New Technology Trends in the D2C Sector

In India, EMI payments are not a novel concept. People have been making huge purchases such as autos and large items such as refrigerators and televisions. It did, however, have certain limits. It necessitated extensive physical paperwork and bank authorization. A large portion of the populace was also denied access to EMIs. Large corporations restricted their EMI options to rich customers and high-priced product categories. According to estimates, just 45 million of India's 550 million PAN card holders have access to credit. This finally limited the ability of the wealthy to obtain an EMI. Fintechs have entered the market to alter who has access to credit and where they can utilise it.

The transition occurred in the post-covid period, when contactless payments became the standard. For convenient payments, the RBI promoted UPI, recurring payments, and online verifications (KYC). The majority of D2C brands have transferred their attention online. Their target online audience was Tier I city audiences, who are known to be internet aware. Brands rapidly learned, however, that Tier II-V cities had strong demand as well. Another group that came to light was the Gen Zs, or people who are just starting out in the labour.

Most D2C brands now identify Gen Zs and Tier II-V city audiences as their target audience. This generation has more purchasing power because of the many EMI payment alternatives accessible in the market. In contrast to the old method of obtaining EMI finance, online verification is now convenient, hassle-free, and requires little to no physical evidence. The majority of payment platforms employ underwriting to anticipate credit history in less than 2 minutes.

Split payments alleviated problems for both brands and customers. While customers were more likely to buy an item when they had to split the payments, brands saw an increase in sales and revenue. The narrative of EMI payments for D2C categories is a key trend to examine here. Previously, EMI instalments were connected with high prices. Payments for hair colours, protein powders, earbuds, and other items can now be split. When businesses joined with splinter payment systems, their COD (cash on delivery) transactions and return rates were reduced. This increased their average order value and put them in a position to connect with platforms that provide their customers with a smooth and quick approval rate.

EMIs have also been rapidly embraced by the female population. According to research, 22% of Indian women intend to use instalment payments for their personal money in the next 12 months. As a result, split payments have made waves in the traditional narrative of men having a disproportionate share of purchasing power. Even among women, Gen Z women have been more active in taking out EMIs to acquire items in the fashion and cosmetics areas.

D2C patterns have changed toward appealing to consumers who can make credit purchases. EMI payment services have been successful in filling the credit gap for those who require it. Currently, there are 700 million internet users who can take advantage of split payment services from everywhere in the country.