The preference for shopping on credit cards doubled to 7% compared to last year’s festive period
New Delhi: Credit has almost doubled this festive season largely led by credit cards and buy now, pay later (BNPL) options for D2C brands, a release by New Delhi-based e-commerce enabler Gokwik said. The preference for credit surged from 3.49% to 6.9% this year thus indicating healthy economic performance and increased consumer sentiment, the release added.
During this Diwali sale period, shoppers showcased a higher preference for prepaid payment modes with a 13% surge in prepaid orders compared to last year.
Cash on delivery (COD) orders saw an 8% dip in the same period, reveals GoKwik. While COD enables businesses to access a wider customer base in tier 2 and tier 3 regions, it can also cause cash flow delays, higher return rates, and increased logistical costs, potentially impacting profitability.
“We’ve been focused on building an ecosystem that supports this innate need among Indian shoppers. Having a higher prepaid share of orders helps brands mitigate the impact of return to origin (RTO) and enables profitable growth for them,” said Chirag Taneja, co-founder and CEO (chief executive officer), GoKwik.
Categories such as footwear and fashion have seen the highest preference for credit-based prepaid payments while certain other categories like beauty and personal care continued to show high preference for cash on delivery. Another interesting trend during this festive period is the shift in consumer preference from COD to credit payment options such as credit cards and BNPL in tier 3 cities.
While overall average order value (AOV) rose by a nominal 3% during this period, categories like fashion and jewellery saw particularly strong growth at 15% and 13% respectively. Categories with high AOV products like electronics saw a 36% increase in credit card payments and a 27% increase in BNPL, showing that shoppers prefer these payment methods for high-value purchases.
Founded in 2020, GoKwik is an e-commerce enablement company focusing predominantly on unlocking growth for e-commerce brands by solving crucial challenges across the e-commerce funnel, helping e-commerce brands provide a seamless shopping experience to their customers, offering smart COD interventions across cities and towns, reducing return to origin (RTO) for their partners, manage returns and exchanges and maximise customer engagement across all channels.
