MUMBAI: Sign up for three months and get the 4-month membership free, screams an ad from Talwalkars. The fitness chain is not the only one luring consumers using the good old marketing mantra of discounts. Beauty salons have announced "happy hours" , while aspirers of high-end mobile phones are flashing iPhones and Samsung Galaxy phones, thanks to equated monthly instalment (EMI) schemes and cash-back offers on some of these iconic brands.
Consumers never had it so good in a long time. From consumer electronics and automobiles to hotels and real estate , freebies and discount schemes are being offered in a more innovative way than before — all that to spur demand at a time when the consumer sentiment is low. While Standard Chartered is offering a 5% cash back on EMI transactions for the iPhone 4 for a limited period, there is a 15% cash back on select Samsung Galaxy phones on a 12-month EMI programme. Six-month and 12-month EMIs, said Vijay Sales' managing partner, Nilesh Gupta, are driving sales of high-end mobile phones. Others like Sony Xperia Z are throwing in free accessories.
Discount schemes in the consumer durables and consumer electronics sector, where growth has been flat, are different , largely because it's a longterm purchase. OnidaBSE 0.00 % is offering zero down payment, zero interest rate and no processing fee, free installation and exchange benefits of up to Rs 10,000. There are certain airconditioning brands offering free installation, which is like an indirect discount of around Rs 1,500-2 ,000. Even on low-value items such as cookware, Sunflame is offering Rs 1,000 discount on select products.
A top consumer durables company CEO, who didn't wish to be identified, said the industry is facing one of its worst periods as most consumer goods companies, be it in auto or durables , had planned extra capacities based on the bullishness after comfortably tiding over the slowdown of 2008-09 . Discounts and schemes help in clearing inventory and driving revenues, which are either flat or negative , except for mobile phones, he said. To cash in on the ongoing IPL cricket season, Sony had launched a special EMI scheme on Bravia flat panel televisions , wherein consumers could purchase Bravia with a down-payment of Rs 2,999 and 9 EMIs per month, with zero processing fees. Others are also making competitive offers.
In automobiles, where EMIs are popular, Volkswagen launched a unique scheme which offers a new Vento in a tradeoff for an old car. All the consumer pays is Re 1 and nothing at all for one year. Select Skoda dealers were offering a Fabia hatchback free on the purchase of a Rapid sedan, albeit the customer would get the Fabia after five years. In the luxury segment , BMW is offering up to 100% finance on ex-showroom and consumers have the option to pay 50% of the loan in three years on the BMW 5 Series and the 3 Series. Besides, there is no service and maintenance cost for three years or 60,000 km. Similarly, Mercedes has introduced flexible finance options which include complimentary maintenance.
Mahindra & Mahindra, on the other hand, is offering benefits of up to Rs 70,000 on Xylo. "When competition heats up, we usually see more competitiveness in pricing... discounts are a regional phenomenon and it depends on the inventories or the demand in a given market," said Pravin Shah, chief executive, automotive division, M&M.
Discounts and freebies, primarily the preserve of FMCG companies, are now being used across categories to free up inventory and turn non-peak hours more profitable. So, Lakme Salons have announced "happy hours" during week days from 10 am to 3 pm wherein a customer gets a discount of 20% on a bill value of Rs 400.
The fact that even gold, silver and petrol prices are down would bolster the low consumer sentiment. So select jewellers are wooing consumers even before Akshaya tritiya in May. Geetanjali jewellers, for one, is offering branded watches worth Rs 4,000 free on a purchase of Rs 15,000 on its diamond jewellery brand. Sales by retail chains for their clothing line is also a common sight.
With inflation sliding to a three-year low and if rate cut talks by the RBI materialize, consumers could definitely feel the balm. Besides food, clothing and accessories, what could perhaps be the icing on the cake for the consumer is that dream home which has moved out of reach . Staring at dismal sales, real estate companies have realized they have to offer value to lure consumers back. So when L&T launched a scheme at around Rs 15,000 per sq ft some time back at Mumbai's Powai, while the prevailing prices were in the region of Rs 20,000 and above, they were immediately able to sell a substantial part of the project.
Apart from value offerings , some like Shapoorji Pallonji offered a project in Kandivili, a western suburb of Mumbai, at Rs 11,650 per sq ft under a 20:80 scheme. The scheme entails that a consumer makes a down payment of 20% and the rest is tied through a bank loan with the developer bearing the interest component, either till possession or for a fixed period. Bombay DyeingBSE 1.96 % has launched a variation of this 20:80 scheme, which enables an individual to pay just 20% and the balance at the time of possession.
Besides, developers are reconfiguring their pre-launch schemes. Earlier, these were offered two to three months before the project was launched, but now that is being done for periods of up to two years, with a discount. Some are even allowing the first transfer of property before the mandatory lockin of two to three years without charging a transfer fee. Others are throwing in cars as well. Delhi also has a spattering of such schemes, the only difference being that developers generally allow re-sales without charging transfer fees. "Low residential sales due to increase in prices over last two years has encouraged developers to resort to innovative payment plans like 20:80 or take loan with principal & interest assigned to developer until possession. Some are offering kitchen or household items as part of package, special discounts are also encouraged for those who are willing to pay full payment or 50% to 70%..., " said Sanjay Dutt, executive MD, South Asia, Cushman & Wakefield.
And for those who were planning to give this year's holiday season a miss, think again. Taking a cue from FMCG companies , MakeMyTrip is offering a BOGOF (buy one get one free) on domestic airline tickets, albeit on the base fare only, at a time when the holiday season has just started. Similarly Swisstours is offering up to 50% discount on mountain railways and free entry to nearly 400 museums along with free travel for children under 16.CoxBSE -0.39 % & Kings on the other hand is giving customers cash back of Rs 10,000 per couple if tickets are booked before a certain deadline. Hotels are not far behind either with several hotel chains including Oberoi Hotels offering schemes which throw in additional nights free.
IT'S A STEAL
aStanC is offering a 5% cash back on EMI transactions for the iPhone 4 besides a 15% cash back on select Samsung Galaxy phones on a 12-month EMI scheme is offering free accessories with Xperia Z Onida has a scheme that offers zero down payment, zero interest rate and no processing fee, besides exchange benefits of up to Rs 10,000 aM&M is offering benefits of up to Rs 70,000 on Xylo aLakme Salons offer a discount of 20% of bills of Rs 400 or more during happy hours - 10 am to 3 pm - during weekdays aReal estate companies like L&T and Shapoorji Pallonji offer discounts and easy payments options