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Cos bet on freebies to boost sales in festive season

Manufacturers and retailers are betting on freebies and special offers to boost sales this festive season, even though the central bank has poured cold water by banning "zero percent" interest schemes.

Major players in the consumer durables business including Samsung, LG, Sony, Whirlpool and Voltas are offering special discounts and freebies to attract consumers.

Marketing competition through freebies and special offers intensified among the major players after the Reserve Bank of India (RBI) clamped down on zero percent interest scheme recently, terming it as a "pernicious practice" which deters customer protection and accounting integrity.

Nearly 20 percent festive season sale last year came through the so called zero percent equated monthly installment (EMI) route.

The central bank's action has come as a dampener for manufacturers and retailers already struggling to maintain sales due to sluggish demands.

"The general perception is that it (RBI action) would affect sales as there is a growing trend of consumer durable purchases through the zero percent finance route," Pradeep Bakshi, president and chief operating officer, unitary products business group at Tata Group firm Voltas, told agency.

Bakshi said Voltas, the biggest player in air conditioner business in the country, would address the challenges arising out of the RBI policy through special offers.

"Voltas has a specific product offering in the air-conditioning domain; we will address the market through various other consumer friendly finance offers. Hence the impact on our AC sales would be limited," Bakshi said.

Senior vice president of Samsung India Atul Jain said his company has planned several promotional offers keeping in mind the festive season.

"Samsung has planned several promotional offers which include assured gifts with each purchase of a Samsung audio visual or home appliance product," he said.

Freebies offered by the company include Samsung Galaxy Tab210, air track home theatre, steam irons, and cash back on purchase of LED or plasma panel televisions and home appliances such as refrigerators, washing machines and microwave ovens.

Similarly, Whirlpool has planned a wide range of promotional offers and its spokesperson Shantanu Dasgupta said the company targets around 15 percent increase in its sale this festive season.

Multi-brand consumer electronic and home appliances retail chain Digiworld is very optimistic and has set a target of more than doubling this festive season sale year-on-year.

"On every purchase made at Digiworld stores, customers will get an assured gift. The gifts vary on the basis of the price range and purchases made by the customers... Through this promotion, the company is looking at a more than 100 percent sales growth over the same period last year," Digiworld's chief operating officer Jaideep Rathore said.

On RBI's clamp down on zero percent interest scheme, Rathore said, "the policy would definitely have an effect on the customers' buying patterns, but the extent of the same is yet to be known."

"We believe main change has to come from the manufacturers' end and accordingly the sector will move ahead," he added.

Ajit Joshi, managing director and chief executive officer of Infiniti Retail, a Tata Group firm that runs multi-brand electronics stores under the name Croma, said it is difficult to assess the extent to which the ban on zero percent interest scheme would have on the sale.

"We will have to wait and watch the impact of this decision on the consumers and the retailers," he said.

Joshi said along with special offers Croma has also launched a strong marketing initiative to boost the festive season sale.

"We have observed that customers are looking at various options to avail the best offers during this festive season and we are planning accordingly," Joshi said.