The sheer thought of unlimited entertainment choices is making Smart TVs the most popular choice when it comes to new TV purchases. In search for this on-demand entertainment delivered seamlessly via a host of OTT and gaming apps, households across the World, especially in emerging markets are seeing a high demand for these Smart Television sets.
While the prices of smart TVs have come down, price sensitivity remains a challenge that is hindering market growth. For consumers in emerging markets, the high upfront cost of Smart TVs poses a significant barrier. Offering affordable payment plans can help overcome this barrier, making Smart TVs more accessible and boosting sales in these markets.
The Appeal of Smart TVs in Emerging Markets
By 2026, smart TV ownership is expected to reach over 1.1 billion households worldwide, accounting for 51% of all households.
Advancements in technology, growth in internet penetration, and consumers demanding enhanced viewing experiences are driving this demand, which is estimated to grow at a CAGR of 10.7% between 2024 to 2034. Beyond entertainment, these devices also serve as educational tools, making them desirable for families.
Affordability, however, remains the biggest factor for smart TV ownership, especially for individuals who lack a credit history, limiting their access to traditional financing options such as bank loans and credit cards.
The Challenge for New-to-Credit Customers
Individuals with little or no credit history, are known as new-to-credit (NTC) customers. In India, about 50% of the adult population, or about 400 million people, with no credit bureau history, fall into this category. Reports indicate that 35 million consumers in 2021, became new to credit, with an additional 31 million following in the first nine months of 2022. These customers often encounter higher interest rates or outright denial when seeking credit, making it challenging for them to afford relatively high-value items such as Smart TVs.
The lack of credit history does not necessarily indicate financial instability. Many new-to-credit customers are young individuals from cash-based economies who have not yet had the opportunity to build a credit record. Hence, affordable financial solutions are needed for large purchases without high interest rates or large down payments.
Smart TV Financing: Bridging the Gap
As smart TVs continue to advance in technology and price, Smart TV financing is becoming increasingly popular. Smart TV financing refers to the various ways in which consumers can purchase smart TVs through flexible payment plans rather than paying the full price upfront.
Installment Plans
Smart TVs can be made accessible through installment plans. By spreading the cost into manageable monthly payments, finance providers reduce the financial burden on consumers. This also helps build a credit history for future financial transactions.
Buy Now, Pay Later (BNPL)
BNPL services are popular globally and benefit new-to-credit customers by allowing them to buy a Smart TV and pay over time without interest, as long as they follow the payment schedule.
Telecom Operator Subsidy though Broadband bundling
Telecom operators can bundle smart TVs with broadband packages, subsidizing the costs for consumers, making them more affordable.
Benefits of Smart TV Financing
Affordability:
Spreading the cost over several months makes high-end smart TVs more affordable.
Access to Better Models:
Financing allows consumers to buy higher-end models with better features that they might not be able to afford upfront.
Bundled Offers:
Telecom operator subsidies can provide additional benefits like discounted broadband services or bundled packages.
Rise in Smart TV Sales
By reducing upfront costs and offering affordable payment options, smart TVs can become more accessible to customers with low or no credit scores. Options such as installment plans and Buy Now, Pay Later (BNPL) services attract customers. This drives sales and increases market penetration in regions with budget-conscious consumers.
Conclusion
Smart TV Financing is a key driver for Smart TV sales in emerging markets. By offering innovative financing solutions retailers and financial institutions can make Smart TVs more accessible to a broader audience.
Datacultr’s Smart TV Financing platform, enables financial institutions to offer unbanked and underbanked consumers, access to smart devices with manageable EMIs. It helps build credit, provides financial education, and protects against predatory lending, enabling informed decisions and safeguarding customers.
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