Flipkart’s strategy to increase sales: interest-free EMIs for customers

In order to woo more buyers and increase their sales, Flipkart recently introduced a payments method, wherein buyers can now enjoy the facility of interest-free EMIs.

The etailer has joined hands with loan agency Bajaj Finserv and well-known electronics brands for this payments program.

• Using this method, buyers can purchase electronic goods worth Rs. 5000 or above

• Can choose from three, six or nine months equal monthly installments (EMIs)

• No additional fees, interest or down payments

Surojit Chatterjee, Senior Vice President, Product at Flipkart disclosed,

“According to our surveys, consumers are willing to pay more over time for essential things. And in this case, it’s not credit as such because there are no fees or interest.”

To boost sales of high-end products & large appliances

Binny Bansal, Co-founder & CEO of Flipkart had revealed that mobile phones and home & large appliances are top selling product categories on Flipkart. In fact, the etailer believes that large appliances will drive its growth in 2016-17. No wonder, the company is looking for innovative ways such as zero-interest-EMI to push sales of these goods.

And it’s working too, according to the top official.

“In the three weeks that we’ve launched the no-cost EMIs, we’ve seen customers have upgraded their purchases because of it. We’re thinking of affordability as an overall problem to solve. We will come at this problem from different angles,” said Chatterjee.

Industry experts feel that payment services like these will persuade buyers to shop online and sales of high-end products & large appliances will multiply as well.

Not violating any norms, says Flipkart

In the post-FDI ecommerce period, the moment marketplaces launch any new service, feature or sale, the first question that comes to everyone’s mind is ‘are they violating any rule’? Therefore, etailers are extra careful about their new initiatives.

In this case, Flipkart has made it clear that the interest-free payment scheme doesn’t qualify as ‘influencing price of the product’, which is prohibited as per the new guidelines. Chatterjee asserted,

“We’ve talked to legal experts and regulators, and this already happens in the offline world. We’ve done our due diligence appropriately before launching.”

Amid repeated devaluation, Flipkart is looking for alternate ways to increase revenue and profitability. From counting on Ekart, and advertising unit to adopting consumer-centric approach like Amazon, the etailer is trying to reach sustainable profitability as soon as possible.