EMI has become what the Business Standard described as the “universal and ubiquitous brand attribute”, in a luxury market where consumers still also search out value for money.
Indian buyers of premium goods want to balance the “bragging rights” that go with buying a luxury item – whether it’s luxury cars or top-end fragrances – with the need for affordability, the Standard said.
So, rather than lowering price tags and risk damaging the kudos of a brand, EMI seems to offer the best of both worlds.
“It is the mindset that differentiates an Indian consumer from a global one,” Sushmita Balasubramaniam, South Asia Domain Lead, Commerce at market research firm Kantar TNS told the Business Standard.
The trend has grown along with the increasing popularity of e-commerce, which has widened consumer access to luxury goods beyond the big cities where the luxury malls are sited.
The Standard cited the case of the iPhone, which has faced strong competition from Chinese smartphone brands in India.
In September, Apple launched the top-of-market iPhoneX, with a price tag of Rp91,900. In the approach to launch, the fact that the iPhone was available on “no-cost EMI” was a key marketing message.
Rivals even targeted this. “Choose wisely between MI or EMI,” wrote Manu Kumar Jain, the country head of Xiaomi – MI being the Xiaomi smartphone model.
The EMI offering is part of a need to widen access to premium brands, allowing middle-market consumers to selectively trade up to higher levels of quality, industry observers say.
“There’s one thing that all the luxury brands are looking at: democratisation of luxury. The fact that one can buy premium, luxury segment on EMI reflects that,” pointed out Balasubramaniam.
“People born into the luxury segment are a small percentage of total. Now the neo-rich are joining the luxury fold, that is why there is so much action in the so-called affordable segment.”
She added that luxury brands are “looking for ways to get buyers (who value price and want luxury brands) in, the only way they can do this is to offer their products and services as small value packs so that consumers can sample the experience, and when they find value they will spend”.
Sourced from Business Standard; additional content by WARC staff