Festive retailers lean on financing as higher input costs push up prices
Indian consumer brands are widening festive financing and value offers as costs rise. Financing schemes could account for 60–80% of transactions across electronics, durables and fashion, while Videotex cited a 30–40% increase in input costs over the past six months.
The development
Indian consumer brands are expanding financing schemes for the festive season, with such plans expected to account for 60-80% of transactions in electronics, durables and fashion. Videotex said input costs rose 30-40% over six months, while jewellery and e-commerce retailers widened value offerings.
The numbers
- September 28
- close to half
- 30-40%
- six months
- 32-inch
- 60-80%
- 70%
- Rs 2,500
- 5%
Why it matters to operators and investors
Prioritize partnerships or acquisitions in consumer finance, BNPL, trade-in and value retail capabilities that can lower purchase friction across durable and electronics categories.
What to watch next
- Share of transactions financed versus cash/UPI payments during peak festive weeks.
- EMI approval rates, lender underwriting changes and reported early-stage delinquency trends.
- Gross-margin movement after accounting for finance subsidies, cashback and exchange costs.
- Average selling price growth versus unit-volume growth in televisions, appliances, smartphones and fashion.
- Inventory aging and depth of markdowns immediately after festive sales.
- Further movement in commodity, component, freight and currency costs that could force another round of price hikes.
- Expand bank, NBFC and card partnerships to offer category-specific no-cost EMI without fully self-funding interest subsidies.
- Prioritize financing on higher-margin, attachment-rich SKUs and bundles rather than applying blanket discounts across assortments.
- Use exchange offers, extended warranties and accessories to protect realized margin while maintaining an affordable EMI headline.
- Tighten credit-screening and monitor approval-rate, cancellation and early-delinquency cohorts by customer segment and geography.
- Build post-festive retention campaigns around service, upgrades and replenishment to offset demand pulled forward during the sale window.
The counter-case
Expanded EMI and credit offers may preserve unit volumes but can erode margins through financing subsidies, merchant fees and deeper promotions. If input-cost inflation persists, retailers face a choice between absorbing costs or risking demand destruction once consumers hit credit limits. A financing-led festive spike could also pull demand forward, leaving a weaker post-season period and higher defaults or delinquencies for lenders.