EMI, new lure from e-com biz

EMI, new lure from e-com biz

Slowly but steadily consumers in India are getting hooked to online shopping, generally known as e-commerce. Now, the Rs 28,500 crore-industry is set to lure even more customers by offering EMI (equated monthly installment) payment option, hugely popular for re-paying large loans.

In e-commerce too it is getting popular as the consumers do not have to pay the entire sum on purchase, but can pay up in pre-fixed installments every month for a stipulated time.

Recently websites like Naptol, Buytheprice, Flipkart, Caratlane and others have introduced this option in their payment-mode section where customers need to buy using their credit card and pay in three or six months. This, they feel, is drawing more consumers without burning a hole in their pocket.

Steady growth

For Buytheprice.com, EMI schemes, introduced in January 2012, have contributed to 18 per cent of their revenue in January and 30 per cent more in April, showing a steady growth in this segment. With Citibank on board and many more like ICICI and HDFC joining soon, the company eyes even more revenue from this initiative.

“Tablets, mobiles and laptops are the products consumers are buying online through EMI,” said Naptol.com ecommerce Head, Sachin Singhal speaking on the trend in buying.

However, secure it might be there still remains a concern on how safe it is to sell products on EMIs where one doesn’t know if the money can be recovered from the customer. 

Some websites have taken it even one step further by offering such payment options for precious stones. Caratlane, an online retail portal for solitaires, jewellery and gold coins,  for instance, began the service way back in 2009 and has since seen 15 per cent surge in buying. CaratLane Senior VP, Kalaivani Sadagopan said that it is useful for consumers who wish to purchase more expensive jewellery products and would like to stagger their payouts.
 
However, there are processing fees charged on the purchase. Flipkart charges a flat processing fee of Rs 100 for the three-month EMI option, while those opting to pay through the six-month equated monthly installment option need to pay Rs 500.

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