What does a couple on a budget that wants a big, fat Indian wedding do? They could put it off until they can finance it, or simply go low-key. Or, they could do what Taran and Nisha did. Find an EMI plan for their ‘shaadi’. The Faridabad-based couple (names changed), both in their late 20s, met, fell in love and dreamed of happily ever afters. But there would be a wedding in between and planning for the special day — with the guest list and all the bells and whistles thrown in — brought the realization that it was beyond their means.
Taran, who works with a fintech company in Gurgaon, and Isha, employee of a SaaS startups, have just begun to climb their career ladders. One morning this February, while scouting for venues at Sirhaul near the Delhi-Gurgaon border, Taran saw a hoarding that read: “Marry now, pay later.” Intrigued, he dialed the number advertised. That’s when he learned of EMI plans being offered for weddings, the same way they were for, say, a new cellphone or a microwave or a flight ticket. Without a second thought, he went for it. “I got the EMI approval in hours and booked Radisson in Gurgaon as my wedding venue. Saving up on this cost means I have more in hand to spend on other things,” Taran says. SanKash, a travel fintech firm based in Gurgaon, recently partnered with the Radisson Hotel in Udyog Vihar for its ‘marry now, pay later’ (MNPL) plans. “We’ve been into travel now, pay later; cruise now, pay later; and even fly now, pay later. But MPCL happened by chance. We were plugging the idea of ​​’stay now, pay later’ EMIs with Radisson properties when this idea came up.
Hotel bookings are low during off-season, so weddings serve as a good revenue source for hotels. One thing led to another and now, we’re collaborating with hotels in tier-2 cities as well,” says Akash Dahiya, co-founder and CEO of SanKash. SanKash, which launched this option a few months back, says it’s getting around 20-25 daily applications for funding up to Rs 15 lakh each. The company, founded in 2018, doesn’t have that kind of resources to cater to all, but it’s hoping to scale up in the coming months. “It is a problem of plenty. We were testing the waters when we ventured into this, and it’s opened up new opportunities for us,” Dahiya says, adding that the company is aiming to make this a core business. Bengaluru-based event organizing company Plan A Wedding read the market for MNPL earlier and debuted its eponymous startup, ‘Marry Now Pay Later’, in the second half of 2020 to make the most of pent-up demand for weddings after the pandemic and lockdowns , which also changed people’s outlooks and spending behavior. “The lockdowns came as a rude shock for the event planning industry. All big-scale and corporate events went online, got deferred or were cancelled. But it was different for the wedding industry.
At the peak of the pandemic, weddings became more intimate and customized, and MNPL was seen as a valuable service,” says Marry Now Pay Later founder and CEO Shank K Vasudev. For now, EMI plans are limited to fixed costs such as wedding venues and honeymoon packages. Variable costs, such as wedding attire and jewellery, are not covered. Couples opting for these packages can split EMIs into six, nine, 12 and 24 months. Interest rates vary. The startup offering the plan gets the loan cleared, does the documentation and takes care of the background checks, for which the credit scores of customers are screened. Vasudev says Marry Now Pay Later is more of an aggregator than a financial services firm. “We are basically providing one-stop financial solutions to customers and we have NBFCs empanelled with us. The customer pays back the loan amount to our NBFC partners,” he says. With NBFCs earning the interest amount, the startups facilitating the loans make their revenue by charging commissions. Tie-ups with NBFCs and hotels, payment gateway charges and value-added service costs are among their revenue sources, they say.
Despite its norm — Indians spend around $3.8 trillion a year on weddings, according to a 2016 KPMG report — little has changed in how the stage is set. Most businesses in the sector are still unorganized service providers, and startups see the merit of a service aggregator system. “We also help customers connect with the service providers best suited for their needs,” Vasudev says. Not all band baaja But market analysts are skeptical about the success of such schemes as a revenue generator for startups. “Basically, they are trying to build a customized variant of a personal loan. The Indian wedding industry is indeed huge, but it is not easily penetrable. Unlike in the US, where 70% of the wedding market is credit-based, in India it isn’t even 10%. It’s very difficult to predict the sustainability of such models for now,” says Pankaj Singh, co-founder at ConnexDoor, a Mumbai-based investment platform for fintech startups. Mohamad Faraz, founding partner of micro-venture capitalist firm Upsparks, also expects cultural resistance.
“Weddings are a traditional business. Taking loans is a baggage that many may not prefer to have when they are just starting a new life,” he says. Similarly, the credit that such startups are offering is just about 20-25% of the total wedding costs. “Those who want to have more ostentatious weddings won’t be impressed with getting a quarter of what they need. Most people who want extravagant weddings tend to plan it much ahead in life. Startups will have to find the exact consumer for this model,” Faraz says. “The call of the market is back to basics. Investors want sizeable startups offering a profitable business model. MNPL startups may struggle to convince them of this. Short-term lending is tricky turf,” Singh says. But the startups are hopeful. According to the Confederation of All India Traders (CAIT) estimates, the Indian wedding market is expected to expand 20-25% annually. Around 35 lakh couples are supposed to get married in just the first half of 2023. “It’s a huge market to explore and we are still servicing the tip of the iceberg,” Dahiya of SanKash says. “It is uncharted waters, but in terms of economics, it’s a sound business idea. Of the 25,000 weddings that happened through our platform in a year, 1,500 have been through MNPL,” added Vasudev.