#bajaj consumer finance
Bajaj Finance ties up with retailers for loans to buyers for clothes, shoes, watches
Your browser does not support the video tag.
Now, buy clothes, shoes at zero interest
KOLKATA: Bajaj Finance has tied up with retailers and brands for loans tailor made for buyers of clothes, shoes, watches, eyewear and fashion accessories, making it the first such scheme to be rolled out in India.
The retailers will bear the interest component of the loan, making it a no-cost equated monthly instalment (EMI) option for the consumer. The new thrust was triggered by the company’s pilot project in Pune, Hyderabad and Vadodara that found rising aspiration levels but lower discretionary spending.
Bajaj has tied up with the likes of Flipkart. AND, Global Desi, Benetton, Me & Mom. and hundreds of local retailers, and is in advanced stages of rolling out the scheme with other large retail chains. Consumers running up a bill value exceeding Rs 5,000 can opt for the scheme.
Bajaj Finance president (consumer business) Devang Mody said consumers today have access to all the aspirational fashion brands, but their lower wallet size remains a concern. “Retail fashion finance is common in Western markets done by Gap, Target, Macy’s and Walmart. so it was a natural extension for us as well,” he said.
The company will take the apparel and accessories finance live in 15 markets by this month and double it by Diwali. It has already put in place partnerships with brands covering about 2,000 stores. By the end of this fiscal, Bajaj Finance aims to take that to over 10,000 stores with about 1,500 brands.
Incidentally, jeans brand Levi’s had rolled out a consumer finance scheme six years back in India when the economic slowdown had badly impacted consumer spending. But other brands did not follow up the strategy much then.
Consumers are still sceptical about big-ticket purchases and prefer to limit buying to mostly discount sales and the festival season, though the economic environment has improved since then.
Mody said lifestyle categories like retail fashion, travel and holidays are typically high aspiration categories where purchases are more discretionary and together represent a discretionary spend pool of Rs 4.5 lakh crore, much larger than Bajaj’s mainline business of consumer durables and smartphones.
Bajaj has also forayed into travel and holiday finance by partnering with Cox & Kings. Next on its cards is a finance scheme for grocery, too.
Bajaj, which financed white goods and televisions worth Rs 15,000 crore worth last fiscal year, has 55 lakh consumers enrolled with the company for pre-approved loans. It expects around 25% of them to opt for apparel and fashion loans, translating into spends of around Rs 1,000 crore.