Advertise now, pay later: Flipkart Ads eyes broader seller participation with credit-based platform

India's e-retail advertising market is experiencing substantial growth, with Amazon Seller Services generating Rs 6,649 crore in advertising revenue during 2023-24, while Walmart-owned Flipkart Internet reported Rs 4,972 crore in the same period.

Against this backdrop of expanding digital commerce advertising, Flipkart Ads has launched its 'Advertise Now, Pay Later' (ANPL) platform, a credit-based solution designed to attract more sellers by addressing working capital constraints.

The system allows merchants to run advertising campaigns without upfront payment, instead extending credit based on predicted business performance.

"The genesis of ANPL was this classic problem—sellers have a certain amount of working capital, and they would like to invest as much as possible of that working capital on procuring material, on packaging, on everything to do with their business, and they don't want to prepay for ads," explains Vijay Iyer, vice president and general manager of Flipkart Ads. "Ads have always been seen as this antithesis to working capital."

The platform targets three specific seller concerns that have historically limited advertising participation. Beyond working capital preservation, ANPL addresses seller apprehension about committing funds without guaranteed returns.

"The other problem, which is a very real issue, is when a seller has committed the money for an ad but isn't sure if the returns will meet their expectations," Iyer says, describing the risk-averse mindset the platform seeks to address.

How does it work?

The ANPL system operates through a predictive algorithm that assesses anticipated business performance and extends credit accordingly.

"What this algorithm does is it creates a predictive model of how much business is going to happen, and part of that is offered to the seller as credit," Iyer says.

"So that whole worry—'Oh'my god, you asked me to spend so much money'—that at some level is already taken care of. And let's say even then, if your expense did not go in the right direction and you paused, it is still within your credit. It's not that you have paid that money out of your pocket immediately." The platform refines its predictions as more sellers use the system.

The third component addresses the relationship between paid advertising and organic sales performance. It addresses ensuring advertising investment drives genuinely incremental business rather than simply replacing organic sales that would have occurred naturally.

Sellers want their paid campaigns to act as a catalyst for improved organic performance, creating a positive cycle where advertising spend enhances overall visibility and sales growth.

Sellers who traditionally lack access to credit facilities are automatically eligible for ANPL. "There is no fee or gating to ANPL—it is automatically enabled," Iyer confirms.

"Yesterday you didn't have it; today you have it."

E-commerce advertising evolution

Discussing broader industry developments, Iyer identifies three changes that have affected seller capabilities in recent years. Digital marketplaces have enabled regional businesses to reach national audiences, he notes.

"I think one of the big things that e-commerce has done is taken the traditional powerful knowledge about core businesses and given it a national platform. So now it does not matter where your customer is; you will be able to reach your customer, and I would like to say that advertising has played a role in that," Iyer observes.

The automation of campaign management represents another shift. "The early days of e-commerce required a lot more grunt work to decode what is going on with your selection. Now it's getting more and more automated, and a lot more things are one-click, and predictive," Iyer explains.

Flipkart's approach emphasises universal access across seller segments. "Everything has to be available to everyone," Iyer says. "Will anybody be able to use this irrespective of their sophistication, size, scale, or ambition?"

Making ads relevant

The platform's ad format strategy prioritises integration with organic content over standalone placement. "The more native you are and the more relevant you are, the more is your entitlement as an ad to appear in the natural stream," Iyer explains.

"If I'm interrupting the customer or causing some disturbance, then you cannot be there as an ad unless you're doing something extraordinarily, outrageously cool."

This extends to maintaining consistency between paid and organic listings.

"Our ad formats and our content formats will actually run in parallel with each other," Iyer says. "Whether it's an image, moving image, or video, whatever is available on ads will also be available organically."

The platform requires advertising listings to meet similar relevance standards as organic content. "The organic algorithm or organic listings directly compete with the advertising listings," Iyer explains. "If an ad has to appear, it has to be almost as relevant as organic content."

Regional market insights

Flipkart's research has identified regional variations in advertising reception. "In the east of India, when a brand advertises, the trust factor actually increases—customers feel that if somebody is advertising, there's credibility," Iyer says, citing company research.

However, the platform currently lacks comprehensive hyper-local targeting capabilities. "If somebody wanted to ring-fence the east, we can't do that currently," Iyer acknowledges. "But as hyper-local scales and goes out of metros to non-metros and smaller towns, this is going to become a reality for advertising."

Flipkart does have IRIS, or Insights and Research Intelligence System, a platform launched by Flipkart to provide brands with in-depth customer behaviour insights, which can also provide region-specific insights on how a campaign or an ad is performing. 

AI implementation strategy

Artificial intelligence integration focuses on backend optimisation rather than visible features. "A lot of AI work that we will do will be under the hood. It will be to make your life simple," Iyer explains.

"Let's say I was able to analyse three things for you yesterday; now I will analyse 300 things and then tell you the action, but the action will still be simplified."

Future developments may include predictive campaign management interfaces.

"Envision a situation in 2026 where you open the Flipkart ads dashboard in the morning, and it gives you a list of five things that you have to do that day," Iyer describes. "Each action is targeted at a certain group of SKUs, tells you the benefit you will get, and how much it will cost."

Creative automation tools are already available. "If you are building a PPC ad, you can just do it using AI today, which will sharpen your image, place it in the right way, and give you the output, and it's all free," Iyer explains.

The platform reports strong seller interest in testing new features and formats. "Generally, advertisers are very happy to do experiments—sometimes those tests are free, sometimes they are not, but in general, they are very happy to learn," Iyer observes.

Development priorities

Flipkart Ads plans to focus on improving existing features rather than launching multiple new products. "We don't want to do 100 new things. We want to take one thing and keep at it until it gets better," Iyer explains.

"The better we get, the richer feedback we receive from customers and advertiser partners."

While specific upcoming features remain undisclosed ahead of the festival season, Iyer indicates developments connecting advertising and organic performance are planned for early next year. "There is something we will be launching that connects the whole ads discussion into the organic lifecycle," he says.