MS Dhoni and Co have done what repo rate cuts and budget announcements haven’t been able to do. Thanks to the success of Team India in the Cricket World Cup and rising interest in the game, there has been a small, albeit positive, change in sentiment, especially in the consumer durables space. Bajaj Finance has seen a spike in its television finance business since the world cup started. The event has, without a doubt, triggered growth in an otherwise unchanged market.
Devang Mody, president, consumer finance, Bajaj Finance, says overall there wasn’t much change in sentiment in FY15 but the Cricket World Cup has influenced buyers and brought in 10% additional business at retailers.
“As soon as the first match started, growth rates improved by 10% and reached as high as 15% year on year,” Mody said. Those who had made up their minds to change their television sets did it, boosting the consumption story.
For Bajaj Finance, the consumer durables business accounts for around 30% of its total business (FY14 Rs 4,073 crore) and, within the consumer durable s business, television finance accounts for 45% Bajaj Finance says it is the largest consumer durables financier in India, financing one out of every five flat panel televisions sold in the country.
“We had some special offers but not too distinctive, so it was about the consumer wanting to change and a lot of advertising by television companies during the World Cup,” says Mody.
Mody said a similar spike in television sales and finance was seen during the FIFA World Cup 2014 but, at that time, impact was seen in select markets of Kolkata, Goa, Kerala and the East. The company says it is seeing a change in consumer spending patterns, with spikes seen during block holidays. With consumer finance growing, the company is confident of keeping growth above 35% in FY15. Apart from TV finance, mobile finance is also growing. However, two-wheeler finance has been soft.
While the external situation remains unchanged, a lot of growth can come from internal changes by improving processes and using technology, says Mody. Bajaj Finance had four million customers in FY15 and there is a lot of cross-selling possible to the existing customer base, he said.
The company is hoping to cross-sell products such as personal loans and housing loans to its customers. At the back- end, the company has invested in systems that enable increase the speed of approval.
The company has a presence across 18,000 counters across India, with 4,000 contract staff and 380 relationship managers and vendors such as TCS, to whom some of the support services have been outsourced. Now the company is also expanding into rural markets with the same portfolio.