The future of BNPL startups

Following the Reserve Bank of India’s notification in June on prepaid payment instruments, many BNPL operators have been forced to rethink their business models. YourStory takes a look at what’s behind the headlines, the industry’s thoughts around the circular, and the options they’re considering to

Monday July 25, 2022 , 4 min Read

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Meanwhile, Microsoft is making an entry into social media—although some may say it’s a delayed one. Last week, it announced a new Viva Engage platform, which is built within its Teams app, suggesting the company wants to pitch it as a social networking platform for work.

Not only does Viva have a multimedia news feed but also a Stories feature. It remains to be seen if Microsoft’s new offering can set it apart from its competitors Zoom, Google Meet, and others.

The future of BNPL

BNPL (buy now, pay later), often touted as the first step to warming Indian users to credit products, is under a cloud of misinformation.

Following the Reserve Bank of India’s notification in June on prepaid payment instruments, many BNPL operators have been forced to rethink their business models. YourStory takes a look at what’s behind the headlines, the industry’s thoughts around the circular, and the options they’re considering to become RBI-compliant.

A closer look at the T&C:

Indian BNPL market grew 321% CAGR (compound annual growth rate) during FY19-21 and the average ticket size 24X between FY19-21.
PayU-owned LazyPay, KreditBee, EarlySalary, and Jupiter temporarily suspended their BNPL offerings following RBI’s circular. LazyPay could switch from a prepaid card to a credit card, a source who requested anonymity told YourStory.
The RBI is expected to release detailed guidelines on the BNPL regulation any time this week, according to a source in the central bank.

“The RBI has no problem if a company offers a credit line and does not charge interest on it for three months; it would probably welcome it, because, as a regulator, it always has the best interests of the ‘little guy’ in mind. The problem arises when you take a product that exists, add some bells and whistles and slap a new name on it,” the chief risk officer at a fintech startup told YourStory.

Starting up at the age of 80

It is never too late to begin an entrepreneurial journey. RK and Shakuntala Devi Choudhary, a couple in their 80s, started Avimee Herbal out of their home in Surat in 2021 to solve their daughter’s hair fall problem. The brand has made ~Rs 13 crore worth of sales until July.

Avimee Herbal, which started with just one hair oil, now has 17 SKUs in its kitty, including skincare, beard care, and other hair care products.

The brand’s Keshpallav Hair Oil is its hottest selling product. Additionally, its Hair Tone PV1 Scalp Spray and Ortho CP Pain Relief Oil are also loved by the customers.

A new beginning:

Avimee Herbal has set up a 7,500 sq ft manufacturing facility in Surat where all products are made in-house with raw materials sourced from across the nation.
The brand gets its products tested in a lab in Roorkee. Managing Director Siddhant Agarwal says that by August, an in-house lab unit will be set up, which would reduce the turnaround time.
By the end of the year, the company is expecting to have 50 employees. It is also hiring a chemist to formulate products for skin care, and plans to expand to kids care and pet care soon.

Making Punjab future-ready

Despite entrepreneurs from Punjab building Indian companies with a net worth of over $50 billion and foreign companies with a net worth of more than $100 billion, the state itself has largely missed the technology wave.

One catalyst organisation, Innovation Mission Punjab, has decided to change that.

IMPunjab aims to support entrepreneurs across Punjab with resources, training, networking opportunities, and virtual and physical engagements.

Joining the tech train:

The government appointed Pramod Bhasin (Founder of Genpact, Clix Capital, and Asha Impact) to chair IMPunjab in 2020.
Built as a public-private partnership, IMPunjab is collaborative in nature.
The organisation’s goal is to reach a working population of 14 million, 30 universities, 1000 colleges, and 8 lakh students based in Punjab.

“Post agri and industry boom, Punjab has missed the current economic wave i.e. tech and startups. This hasn’t resulted in investment and jobs in Punjab. The founders of Zomato, Ola, Blinkit, and Flipkart are all Punjabis but migrated to locations with developed startup ecosystems due to a lack of opportunity in Punjab,” Pramod tells YourStory.