Companies Introduce Sweeteners to Alleviate Impact of Rising Prices
MUMBAI: Brands are introducing flexible financing options this festive season to counteract rising product prices. Staggered payment plans and no-cost EMIs are among the strategies aimed at encouraging consumers to upgrade rather than down-trade. Retailers in the apparel and jewellery sectors are opting to expand their entry-level product offerings instead of resorting to heavy discounts, which could harm their margins.
Inflation has prompted brands to increase their reliance on financing schemes, which already account for nearly half of consumer durable purchases. Arjun Bajaj, director at Videotex, noted that while festive sales volumes may be subdued, the overall value of sales is expected to rise due to higher unit costs. He highlighted that prices for certain commodities, including packaging materials and power cords, have surged by 30-40% in the past six months, significantly impacting entry-level products like 32-inch TV sets.
LG Electronics and Panasonic are among the companies offering zero-interest EMIs, extended warranties, and cashbacks to make premium products more accessible. Sanjay Chitkara, director and co-CSMO at LG Electronics India, stated that premiumisation will be a key growth driver this festive season, as consumers are more inclined to upgrade with seasonal bonuses. Financing schemes are projected to facilitate 60% to 80% of transactions in categories such as consumer electronics and fashion, according to Tushar Aggarwal, founder and CEO of fintech Stashfin.
Affordability, the key
CaratLane is emphasizing affordability by providing a broader range of price points instead of relying solely on discounts, according to MD Saumen Bhaumik. He noted that while consumers are becoming more deliberate with their spending, there is not a uniform shift towards lower-priced products. Malabar Gold & Diamonds is leveraging old-gold exchanges, which have accounted for 70% of recent sales, to attract budget-conscious shoppers, as stated by group chairman MP Ahammed.
‘Design over discount’
Gaurav Singh Kushwaha, founder and CEO of BlueStone Jewellery, emphasized a focus on design rather than discounts. He explained that rising gold prices necessitate re-engineering products to maintain genuine choices across various budgets. Liberty Shoes is targeting the below Rs 2,500 price segment, where GST is only 5%. Executive director Anupam Bansal mentioned the goal of offering better design and materials at accessible price points, aiming to premiumise products within an affordable range. Flipkart is collaborating with brands to launch exclusive product packs at value price points, according to Nishant Dalal, VP of consumables, FMCG, and healthcare at the company.
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