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Fintech to be Shot in the Arm for Retailers

Alternative financing platforms, fintech, are emerging as enablers for kitchen retailers who are eyeing big-ticket sales

Siddharth Mahanot

With better spending capacity, a shift towards nuclear families, and the same being facilitated by various affordable housing projects, the need for big-ticket purchases is on the rise in the Indian retail market. This trend, which is no longer restricted to just the upper and upper-middle classes, is providing a boost to domains such as the kitchen industry. Subsequently, there has been a rise in the availability and affordability of kitchen solutions, further spurring the growth of various segments within the industry. The desire among Indian consumers to have contemporary kitchens, regardless of the economic class, has created a promising opportunity for retailers, entrepreneurs, and prospective franchisees.

The modern-day consumers are already accustomed to gaining easy access to credit through retailers. With an increased spending power, their demands have also witnessed a significant shift towards convenience and flexibility. And in this scenario of nail-biting competition, it has become imperative for retailers to seek credit from financial institutions to offer a broader range of consumer products, offers, and schemes. With the emergence of alternative credit lending platforms in this digital era, fintech, small retailers are finally being empowered to re-evaluate and re-consider their credit options to develop solutions and deliver an enhanced consumer experience.

Big-ticket Kitchen Industry

The big-ticket segments, such as modular kitchens are growing at a rapid rate. According to Technavio‘s analysts, the modular kitchen segment in India was projected to grow at an annual CAGR of 51.87% from 2014 to 2019. Moreover, a recent analysis conducted by home interiors and renovation platform Livspace showed that the country had witnessed a phenomenal 350% jump in demand for modular kitchens within a six-month span of late 2017 to early 2018. With modular kitchens increasingly becoming an essential part of Indian homes, consumers are finally beginning to explore and experiment with big-ticket items over the traditionally preferred ones. In lieu of this recent shift, retailers and players in the industry are deploying technology tools, approaching the segment with different business models, and seeking financial aid from digital platforms to keep up with the unprecedented rise in demand.

For instance, several players in this industry have been exploring the franchise model for expansion. Since franchising allows organic growth, this model is being seen by small retailers as an excellent way to expand into and scale a successful progression trajectory. The franchise model will enable retailers to deviate from the traditional operational model to provide contemporary solutions and leverage the opportunities that this ecosystem provides. Moreover, by associating themselves with franchise partners and vendors who already have a base in the industry, these newly-emerging players can further their vision and assert better impact amidst the market and consumers, thereby boosting their sales and growth prospects. Therefore with the big-ticket kitchen industry growing rather well, its retailers are leveraging alternative financial platforms to carve a niche for themselves in the segment.

Financial Empowerment of Retailers

Since long, retailers have worked with finance providers to facilitate big-ticket purchases like furnishings, appliances, kitchen renovation, etc. However, it has been observed that primary and traditional lending incumbents have catered majorly to a small portion of the retail market. This is evident from the low credit approval rates that small retailers face, with more than half of their initial credit applications being declined by banks and other traditional institutions. As a result, many such retailers miss out on opportunities to build their business, while the bigger players powered by banks continue enjoying their collective domination over the home improvement industry and all its segments—be it furnishings, modular kitchen, or even electronics.

A paradigm shift has been witnessed in recent times, with innovations in the fintech landscape leading to several revelations in business and retailer financing. The primary goal for any business in the competitive world of retail is to get more customers and retain them effectively, and these new-age alternative financing lenders seem to understand this need. Even in the kitchen industry, retailers need to regularly invest in their business to keep up with the growing needs of modern-day consumers. Amidst such a landscape, innovations in the fintech segment are addressing the void left behind by traditional financial institutions, empowering small-time retailers in the process.

The emergence of such digital lending platforms has, therefore, created an opportunity for retailers to cater to their customers better. For instance, platforms like Indifi provide tailor-made solutions, designing a loan exclusively for retailers while offering several other benefits alongside. Through the provision of unsecured business loans with quick and hassle-free disbursal, along with the flexible tenure and repayment options, these platforms help retailers achieve their business goals faster. Further, availing of these loans require no collateral, minimum documentation and simple eligibility criteria. Because of such solutions, retailers are increasingly able to extend credit to their customers and help them overcome their budgetary constraints.

This approach of alternative digital financing has been rapidly gaining momentum in the kitchen retail industry, as players target revenue and market share that might otherwise be captured by bigger rival chains. Powered by technology, these non-traditional finance providers will keep empowering retailers to enhance the purchasing experience of their customers.


The author is COO & co-founder of Indifi Technologies. The views expressed in this article are personal.

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