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And now, buy on instalments
Jewellers are trying to change the way consumers purchase gold

Taneesha Kulshrestha

Have you been putting off buying gold because of its skyrocketing price? You’re not alone — the price of gold went up 28% in the past year and the World Gold Council says sales in January-March 2012 were 29% lower than the same time last year. Not surprisingly, jewellers are worried — with current trends, even the festival and wedding season may not be enough to bring back glitter in the jewellery market. There’s little jewellers can do about prices but they’re turning to the consumer durables industry for strategies to tempt consumers to buy. The result: EMI schemes.

The concept was pioneered a few years ago by Titan, but in the past year, a variety of players both online and offline, have introduced it. PC Jewellers, Orra Diamonds, Mehrasons, Joy, TBZ and Gaja are offering EMI schemes; web portals like Caratlane and Suratdiamond have started extending it, too. Even credit card companies like HDFC are tying up with local jewellers to extend the EMI concept on purchasing jewellery through credit card. The customer buys on a 0% interest rate and pays the card company a processing fee, who, in turn, credits the jeweller with a similar sum each month. 

Some jewellers like Titan offer to pay one instalment of the total 12 EMIs payable in a year. “This assures purchase and advance money for the jewellers and often, the consumer’s final jewellery purchase is more than the 12-month payment,” says Rajiv Popley of Popley Jewellers. The money-in-advance gives the jeweller much needed working capital, which he might otherwise loan. “The offer to match one instalment is the interest the jeweller would pay on a similar amount,” he adds. “It works well for the buyer and the jeweller.”

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