Electronic prices rise, discounts fade: Can financing sustain festive sales

Rising component and freight costs are pushing up electronics prices, while brands turn to EMIs and exchange offers to support festive demand

Higher prices for consumer electronics are set to change the way consumers shop during the festive season, with ecommerce platforms and brick-and-mortar stores expected to rely more on financing, exchange and buyback schemes as the scope for outright discounts narrows.

 

Prices of air-conditioners, LED TVs, washing machines and other appliances are set to rise ahead of the festive season, while higher freight and component costs are adding to pressure on manufacturers, reported Business Standard. At the same time, financing is becoming a larger part of electronics purchases.

 

Gaurav Arora, vice-president of payments and SuperCoins at Flipkart, recently told Business Standard that around one-third of the platform's mobiles, large appliances and electronics gross merchandise value (GMV) is expected to come through EMI options during the festive season. Nearly half of high-value electronics purchases are also expected to use some form of affordability option.

 

The festive season will therefore test whether consumers are willing to keep buying higher-priced products if the upfront cost can be spread over several months.

Why are prices rising

The pressure on prices comes from several parts of the supply chain. In smartphones and other devices, memory has become a major cost driver. Counterpoint Research said smartphone memory prices rose more than 80 per cent quarter-on-quarter in the second quarter of 2026. Its bill-of-materials analysis found that component costs for similar low-end smartphone configurations rose 70 per cent year-on-year in Q2, with almost all of the increase coming from memory.

 

Counterpoint said DRAM has overtaken the processor to become the most expensive single component in some smartphones. The research firm has linked the sharp increase in memory prices to demand from AI infrastructure and supply constraints in the memory market.

 

For consumer durables, the cost pressure is broader. Manufacturers are dealing with higher commodity prices as well as elevated logistics costs.

 

Recently, Business Standard reported that freight costs for consumer durable manufacturers had more than doubled over the previous 30-60 days, while shipment delays had stretched beyond 15 days. Successive typhoons in Southeast Asia disrupted component shipments from China and Taiwan, while continuing issues at Red Sea ports pushed up transit times.

Arjun Bajaj, director of Videotex International, a contract manufacturer of TV panels, told Business Standard that shipment delays had stretched to as much as three weeks over the past month. "As a manufacturer, we are seeing recent escalations in freight costs and supply disruptions that could push television prices up by up to 20 per cent for smaller screen sizes and up to 10 per cent for larger screen sizes, depending on the screen size. However, these increases are unlikely to be fully reflected during the festive season, with consumers likely to see a new base price for consumer electronics emerge after Diwali," Bajaj said.

 

A PTI report also cited higher prices of copper, aluminium, steel and crude derivatives, along with freight costs and currency volatility.

Prices rising across consumer electronics

According to the PTI report, air-conditioner prices are set to rise 5-8 per cent from October 1, while some manufacturers are raising prices of washing machines, refrigerators and LED TVs by 3-4 per cent. Blue Star, Godrej Appliances, Haier, Daikin and SPPL have already announced or confirmed price increases across categories.

 

Air-conditioners are a notable case because the category typically sees weaker prices after the summer sales period. This year, manufacturers are facing higher copper and other input costs even as they enter the post-summer period.

 

Haier India President NS Satish told PTI that the company plans to raise room air-conditioner prices by around 5 per cent from October 1. He also confirmed a 2-3 per cent increase in categories such as LED TVs and washing machines.

The report also stated that SPPL, the brand licensee for Thomson, Kodak and Blaupunkt, plans to increase TV prices by around 7 per cent after October, while prices of some appliances have already risen by 4-5 per cent.

 

Talking to Business Standard, Avneet Singh Marwah, chief executive officer of SPPL, also said retailers had not been able to invest enough in TV inventory, creating a possible supply gap during the festive season.

 

On demand during the festive season, Marwah said the company expects consumers to continue buying. He said: "The first half of the year had been sluggish because of global tensions, supply-chain issues and component-related problems." Consumers, he said, are waiting for the festive period because they expect additional offers through exchange and EMI schemes.

How are brands reacting

Higher input costs are making it harder for manufacturers to rely only on discounts. Financing, exchange and assured buyback schemes allow brands and retailers to lower the immediate payment burden without cutting the headline price by the same amount.

 

Samsung has used this model across its flagship smartphones. Its Galaxy Forever programme allows buyers to pay for an eligible device through 24 no-cost EMIs, with an assured buyback value of up to 55 per cent and an option to return or upgrade the device from the 10th month.

 

Google has adopted a similar approach for its Pixel phones. Its Pixel Upgrade Program in India offers buyers a 24-month no-cost EMI and an assured buyback option. Customers become eligible to upgrade to a new Pixel after completing nine monthly payments and before paying the 15th EMI.

 

Samsung has also introduced up to 30-month no-cost EMI plans for its Galaxy Z series foldable phones, extending the repayment period for higher-priced devices.

 

The same approach is visible in appliances.

 

LG offers exchange on products including refrigerators, washing machines, air-conditioners, TVs and microwaves through its online store, with the old product valued after inspection. Retailers such as Croma are also offering exchange value and exchange bonuses on trading in select ACs, washing machines and TVs.

 

For consumers, these schemes can reduce the amount that needs to be paid upfront even when the price of the new product has increased. For manufacturers and retailers, they also provide more ways to support sales without depending entirely on a reduction in the listed price.

 

Marwah said financing companies and card companies also focus on the festive period because of the targets they set for the season.

 

"EMI financing companies and card companies also focus this time of the year as they have their targets for doing the best of their offers," he said.

How are consumers reacting

Counterpoint Research said India's smartphone shipments fell 10 per cent year-on-year in the June quarter, with rising device prices contributing to weaker demand. It also found that the ultra-premium segment remained relatively resilient, supported by financing options that reduced the upfront cost of premium smartphones.

 

The research firm expects financing to account for 42 per cent of smartphone sales in India in 2026, up from 35 per cent in 2025. It expects longer-tenure EMIs, exchange schemes and other affordability measures to play a larger role as brands deal with higher component costs.

 

This is not only a smartphone trend. Flipkart's Arora said affordability options become more important as the value of the purchase increases. Credit-card EMI options become more relevant for purchases in the Rs 20,000-30,000 range and above, he said. Cardless EMI also has a high uptake among customers in Tier-II cities and beyond, where credit-card penetration is lower.

 

For consumer electronics, that puts financing in a different position from a conventional discount. A consumer may still pay more for a television, laptop or smartphone than last year, but the monthly payment can remain within a familiar range if the tenure is extended.

Can financing sustain demand

There are signs that financing can support electronics purchases as prices rise, but it may not fully offset the impact of higher prices. The festive season will also test how retailers balance affordability offers with higher payment and financing costs.

 

Flipkart expects around one-third of the GMV of its mobiles, large appliances and electronics category to come through EMI during the festive season. Arora also expects nearly half of high-value electronics purchases to use some form of affordability option.

 

The payment mix could also be affected by the introduction of merchant discount rates (MDRs) on high-value UPI transactions. Financial Express reported that the new MDR on UPI payments above Rs 2,000 is raising payment costs for large-format retailers just ahead of the festive season. At electronics retailer Vijay Sales, around 15 per cent of transactions are made through UPI, with customers using it for purchases ranging from Rs 5,000 to Rs 20,000, director Nilesh Gupta told the publication.

 

This suggests that the change could lead to greater use of card-linked discounts, cashback and EMI financing for high-value electronics purchases. Such payment options can allow consumers to combine financing with promotional benefits, while retailers avoid the MDR applicable to those UPI transactions.

 

For consumers, this could mean that the festive offer is spread across several components rather than coming entirely as a reduction in the product price. An EMI may lower the monthly outgo, an exchange offer can reduce the amount financed, while a card discount or cashback can lower the effective purchase cost.

 

But financing cannot remove the underlying increase in the price of a product. It spreads that cost over time and depends on consumers having access to credit and being willing to take on another monthly payment. For retailers, meanwhile, the growing use of EMI and card offers comes at a time when payment costs themselves are changing.