Amazon India Revamps Its Pay Later Service to Capture Booming Smartphone Market

Amazon India is set to enhance its Pay Later service, focusing on better financing options to stimulate smartphone sales in the country. With a substantial percentage of smartphone purchases relying on easy financing schemes, Amazon aims to capitalize on the growing market through improved offers in 2024.

Amazon Boosting Pay Later Service:

The Pay Later service, launched in 2020, is getting renewed attention from Amazon as the company looks to strengthen its presence in the smartphone financing landscape. The focus is on providing users without credit cards better EMI offers, making it an attractive option for potential buyers.

Premium Smartphone Segment Growth:

Despite flat overall smartphone sales in volume terms, Amazon India experienced over 40% growth in the premium smartphone segment in value terms during 2023. The popularity of no-cost EMIs played a crucial role in this growth, with customers opting for higher-priced smartphones.

Premiumisation Trend and Upgrading:

The premiumisation trend in India's smartphone market is expected to persist, driven by affordability and a growing selection of tech products. Amazon anticipates continued growth in the premium smartphone segment in 2024, as more customers choose to upgrade their devices.

Market Dynamics and 5G Phones:

India's smartphone shipments remained flat in 2023, with 152 million units. The premium segment witnessed a 64% YoY growth, attributed to easy financing schemes prompting consumers to purchase higher-priced smartphones. Over 70% of Amazon India's smartphone sales were 5G phones, and the company expects increased affordability in this category in 2024.

Online Channels and Customer Benefits:

While online channel shipments decreased by 6%, Amazon India emphasizes its customer-centric approach, offering a wide range of bank offers and benefits. The company sees its financing options and affordability solutions as key differentiators, providing customers with unique advantages.

Targeting Premium Smartphone Buyers with Better Deals

• Currently, only a single-digit percentage of smartphone purchases on Amazon India use Pay Later.

• To boost adoption, Amazon is offering better terms for no-cost EMIs compared to bank offers, making premium phones more accessible.

• This follows a 40% growth in the premium smartphone segment (above ₹30,000) for Amazon India in 2023, driven by EMI purchases.

Frictionless Experience and Market Penetration Strategies:

• Amazon aims to make Pay Later simple and convenient, enabling purchases in just minutes.

• The company is expanding its reach beyond Tier-1 cities, offering affordability and wider selection to attract new customers.

Riding the 5G Wave and Online Challenges:

• Over 70% of smartphones sold on Amazon India in 2023 were 5G models, and this trend is expected to continue.

• Despite a 6% drop in online channel shipments, Amazon remains confident, highlighting its unique customer benefits like diverse bank offers.

Beyond Financing: Enhancing the Shopping Experience

• For 2024, Amazon India is focusing on improving live shopping experiences, offering faster deliveries, and providing tools for informed purchase decisions.

Conclusion:

Amazon India's strategic focus on improving its Pay Later service aligns with the evolving dynamics of the smartphone market. By providing enhanced financing options and catering to the growing demand for premium smartphones, Amazon aims to strengthen its position and offer a seamless experience to consumers in 2024.