Early Diwali as Covid-hit banks offer cracking deals on e-commerce

Bengaluru| Mumbai: An unsteady revival of the consumer economy has set off a discounting war among leading banks in partnership with online platforms and brands, as ecommerce is one among a handful of sectors that are expected to see growth in the festive period.

Bankers and ecommerce executives ET spoke to said tight competition to gain a share of limited demand for credit is causing banks and other lenders to make more aggressive offers than previous years.

The tie-ups between banks and online platforms are aimed at offering customers no-cost EMIs, cashbacks and instant discounts on purchases.

“While the lucrative offers will help customers with affordability, competition among banks is also dictating these trends,” said Harjeet Toor, the business head of retail and small businesses at RBL Bank which is among the largest credit card issuing banks in the country.

“In the market all leading banks are offering exclusive value deals, which will further push the competition on best rates,” Toor added.

Historically, the period between Navratri and Diwali sees a 20% jump in spending on credit cards compared with the rest of the year, but this time the jump is expected to be only 14-16%, he said.

A weak recovery in offline retail amid continuing worries over the pandemic is also forcing banks to double down on their partnerships with ecommerce majors and consumer electronics, appliance and smartphone brands.

Amazon last week said it was partnering with HDFC Bank to offer a 10% instant discount on all purchases made using the lender’s cards during its month-long festive sale.

Its rival, Flipkart, has partnered with public sector SBI and Paytm to offer a similar discount. “The top 100 million consumers that drive most of the sales on ecommerce have multiple cards and we wanted to give them multiple reasons to shop and save this festive season,” said an executive from an ecommerce marketplace.