Levi's selling jeans on installment in India


Here in the United States, Levi's are seen as a decidedly middle of the road brand -- comfortably ensconced somewhere between Wrangler and Abercrombie.

But don't tell that to people in India. In India, Levi Strauss is a highly aspirational brand -- so much so that the company has decided to offer consumers an option to purchase jeans on installment.

The Financial Times reports that "Under the scheme, customers will be able to pay for Levi's priced at Rs1,599 ($33) and above in three installments. The move comes after a two-month experiment at 10 Levi's stores in the software hub of Bangalore, where consumers offered the installment option spent an average of 50% more than normal."

The 50% increase in spending on installment plans also gels nicely with American research that shows that the use of credit cards leads to increased purchasing.

Part of the reason the installment plan can drive sales in India is that credit cards are not widely circulated there. BankRate.com reported last year that "Only 28% of affluent Indians have credit cards, a fraction of the average around the world. As of 2006, credit cards accounted for just 1% of all purchases in India -- one of the lowest percentages in the world."

In the United States of course, people buy jeans on installment all the time -- but instead of three interest-free payments, they spread it out over a decade and pay 18% per year.

Originally published