 "Consumer durables firms")
Consumer durables firms are seeing a pick-up in premium item sales and one of the main reasons driving this growth is better financing options available to the consumer this time.
Companies are offering longer-tenure loans, zero down payments and zero interest on a wider assortment of products than ever before, thus making a product more affordable.
While 18 and 24 months equated monthly instalments (EMIs) were available earlier only on select products, it is now being offered on more products.
“Many people are now opting to buy on EMIs and not too many are buying in cash. Same is the case even with premium electronics and televisions as the amount is huge. Buying on EMIs is now a common scenario,” said Avneet Singh Marwah, chief executive officer (CEO) of SPPL, the brand licensee of Kodak, Thomson, Blaupunkt and White-Westinghouse in India.
He said the adoption rate for financing options is 80-90 per cent. Also, the buy-now-pay-later option has gained traction.
“TV margins are huge and with this, the maker can absorb the interest rate and sell products. More products are offered on EMI and we have also increased the tenure (of loans) on some high-end television panels to make it more convenient for the consumer to buy,” Marwah said.
Consumer durables retail chain Vijay Sales has seen the number of products offered on easier finance options double compared to last year. “Last year, we saw around 15 per cent of goods sold on longer tenures. Now, that has gone up to 30 per cent,” said Nilesh Gupta, managing director (MD), Vijay Sales. He added that television panels have easier payment options compared to last year.
Also, select laptop brands have offered zero down payment and the EMI is spread over 24 months.
Larger items like washing machines and refrigerators are now offered at convenient finance options compared to last year.
“This definitely pushes the customer to opt for a more premium product,” Gupta said.
Godrej Consumer Appliances also said it is offering better finance options for its customers compared to last year.
“Finance accessibility and ease of getting finance has gone up and also the number of companies offering finance options have increased from around one-two to around 14-15 now,” Kamal Nandi, business head and executive vice-president of Godrej Appliances, part of Godrej & Boyce, said.
He added that these finance options have raised affordability in the premium segment and consumers continue to buy with a vengeance, after Covid.
Even Godrej Appliances has offered more lucrative payment options for consumers this festive season. Five years back, it saw 20 per cent of its goods sold on EMI and now this has gone up to 40 per cent.
BSH Home Appliances India, which houses three brands — Bosch, Siemens, and Gaggenau, is also offering consumers longer-tenure EMIs.
“In response to the evolving Indian consumer landscape, marked by higher disposable income and a preference for global trends and advanced technologies, we have customised our consumer financing solutions. Our offerings include a fixed EMI where the customer pays a fixed amount every month on the purchase value, long-tenure EMI options of 18 months, and flexible 8/0 and 12/4 options to cater to specific regional preferences,” said Saif Khan, MD & CEO, BSH Home Appliances India.
Khan added, “We closely study consumer buying behaviour and spending patterns, and customise our consumer financing offers to match their unique preferences. To brighten the festival season for customers, we have introduced enticing cash back offers of up to 20 per cent and extended warranty programmes across our premium range.”
OFFERS GALORE
Consumer durable firms offered 30 per cent of products on convenient payment plans compared to 15 per cent last year
Some laptops were sold at better finance options like zero down payment and EMIs spread over 24 months
Earlier, either two or four month EMIs were paid upfront. And, the remaining over 8-10 months
Godrej Appliances now sees 40 per cent of its goods sold on EMIs compared to 20 per cent 5 years ago
SSPL, the brand licensee of Kodak, Thomson, Blaupunkt and White-Westinghouse in India, is selling its high-end TVs on longer-tenure loans
