"Partnerships Will Play A Critical Role In Market Growth" Nalin Agrawal, Co-Founder And CEO, Snapmint

In an interview with BW Businessworld, Nalin Agrawal, Co-Founder And CEO, Snapmint talks about financial products, NBFCs, marketplace, opportunities and the way forward.

Brief us about your business model like how did the idea come to start and how does it work (step by step procedure)?

The co-founders have known each other for over two decades. Rahul, Anil and I have worked on multiple ventures together since 2006. Abhineet on the other hand was involved in handling pricing, growth and marketing at Jabong, Oyo, Swiggy and Ola.

In 2016, we were working on an ad-tech business collecting anonymized browsing behaviour data from 400M active devices to predict propensity of conversion at lowest cost. We carried out an EMI advertising campaign for a large online commerce brand. The launch of EMI option on checkout gave the brand a 25% lift. But the transaction lift was 0% since the only EMI option available was Credit Card EMI. We saw the opportunity- there were close to 250 million PAN card holders but less than 20 million owned credit cards at that point of time. The sheer under penetration made the team jump! They realised that there was a way to engage with millions of consumers on the internet. Providing them options to make purchases through interest free installments, instantly and digitally without any documentation was the way to go!

This was how Snapmint came into being in 2017!

However within the first year we realized that whilst youngsters wanted to make lifestyle purchases like apparels, shoes and headphones, banks did not want to serve these categories. So we incorporated our own NBFC and got the license in 2019. Since then the company’s online business has grown 14x with 1 in 2 consumers repeating. The company is already live with 350+ lifestyle brands and will add over 2000+ brands to its portfolio this year.

What are the unique key points of your company? How are you different from the existing competitors?

To begin with, it is important to understand GenZ and millennials as a category and its needs that the company is addressing.

A Gen Z consumer in India typically makes close to 12-15 fashion and lifestyle purchases per year. These include headphones, smartwatches, shoes, clothes, sunglasses, backpacks and fitness bands. The existing credit options have ignored these purchase categories. EMI options are designed for appliances, vehicles and other large value goods purchased once in 5-10 years, with long repayment periods. Credit cards are limited to 3% of the affluent tier I segment and come with hidden charges of up to 39% interest rate. Banks on the other hand focus only on the top 5% of the customer base and do not address lifestyle categories.

Snapmint has addressed the gap area in two ways. It has given this audience an access to fashion and lifestyle products on its platform, which can be purchased using the market's best, most competitive credit - all in a one stop shop.

Moreover, the simplicity of Snapmint’s marketplace has helped the company strike a deep chord with this consumer category. They don’t have to bear the brunt of any tedious underwriting process. The entire purchase journey for them is instant, smartphone based with no documentation.

What is the funding status and monetization model?

Snapmint is backed by Kae Capital, Secocha Ventures and HNIs.

Existing market players charge higher interest rates from their customers as compared to the brands. A standard credit card for instance, makes more money with its revolving credit facility by extending the repayment period for its customers, encouraging them to pay just bare minimum and pay interest on rest.

Snapmint’s business model is simple. The bulk of its revenues comes from brands and merchant partners who want to reach out to a new consumer segment (GenZ and millennials) and increase sales with them. This in turn allows the company to focus on its customers and offer credit at the lowest rates.

What challenges are you facing in running your business?

We truly want to ensure that consumers get access to fair, honest and transparent financial products with us. The financial services industry in general has come a long way in putting in place enablers for this, but there remains much more that can be done. For example, much can be done to simplify auto-debit processes for consumers, especially reduction of failure rates at NPCI; allowing standing instructions on debit cards and UPI across all issuing banks; and also ensure that banks don't charge exorbitant bounce fees or penalties. Even though Snapmint does not charge late payment fees, when we issue an auto debit request to the consumer's bank, they charge over Rs 200 for a bounce even if the customer was Rs. 50 short.

The other challenge is in the light of the current pandemic, which has caused huge disruption to small businesses. While the RBI has proactively announced a number of measures, such as slashing interest rates, to provide respite and ease liquidity in the system, the benefits are mostly accrued by the large banks and are not flowing down to the smaller NBFCs like ours who play a critical role in the last mile connect with the masses.

How has been your consumer’s response so far?

Snapmint has witnessed 2 million downloads for its mobile app; with 700k active monthly users. It has engaged with over 1 million customers till date, with the top 15% of whom spending over Rs 50000 annually with Snapmint. The company continues to get a positive response from GenZ and millennials across India. Many customers have created un-incentivized videos on social media talking about their positive experience of engaging with the company. This is yet another testimony to our strong connection with this consumer category.

What are the traction details (like users, app downloads & other achievements of the company)?

Snapmint’s online business has grown 14x in the last two years (despite two lost covid quarters) with an encouraging two-fold repeat usage behaviour, as mentioned earlier. Amidst the pandemic last year, the number of brands available on the Snapmint platform doubled to more than 350.

Snapmint added new categories like apparel including shoes and t-shirts, accessories like backpacks and sunglasses and personal electronics including smartwatches, headphones, smart bands in addition to being integrated with merchant aggregators. Looking to sustain this momentum, the company is projecting to be available with 2000+ lifestyle brands in the coming year.

From 1300 cities and towns in 2019, Snapmint now has a direct reach to 2200 cities and towns, having already provided credit to over a million consumers- youngsters in India across consumer electronics, apparels, fashion accessories and smartphones categories.

How do you look at expansion?

On the demand side, Snapmint’s strategic partnerships will play a critical role in aiding its market growth. The tie up with Google Pay, for instance, will widen its existing reach, connect with 125 Mn Gpay users and add value to their purchase needs. On the supply side, a new offering for GenZ and millennials for using Snapmint across thousands of offline retailers in Electronics and Fashion categories is in the pipeline.

What are your marketing plans?

Snapmint has been growing organically at an encouraging rate. For now, it continues to maintain consistent communication with its customer base via prominent social media platforms.

In the near future, the company will utilise Google ads and leverage OTT platforms to amplify its reach. As we grow, affiliates will also become a part of the marketing mix.

What has been the biggest learning so far?

GenZ and millennials are driven by their fashion and lifestyle choices. They are extremely receptive to purchase entry or mid-range priced products, a Rs 3000 worth smartwatch on interest free installments. They are making smart financial choices and yet satisfying their purchase needs.

What is the market size and opportunity?

India currently has over 125M PAN card holders below the age of 30. This country is further adding over 10M youngsters to the workforce every year. And there are no convenient and affordable credit options for these youngsters to improve their lives. Starting by becoming the top of the wallet for their lifestyle purchases the plan is to become a fair and transparent financial partner for them.

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