Young South Africans aged between 26 and 35 – typically settling into their career journeys, building families and homes – are the country’s leading consumer base for acquiring electronics and home appliances using subscription services.
This is according to a recent analysis of the subscription purchase market by Teljoy, South Africa’s foremost home furnishing subscription service, providing a range of appliances, entertainment, and technology products since 1969.
“The increasing popularity of the subscription model being mainly driven by the convenience and flexibility of paying an affordable monthly cost as an alternative to making an expensive purchase on a credit card or with cash,” says Jonathan Hurvitz, CEO at Teljoy. “Given the rising cost of living in South Africa, it allows our customers to free up budget that they would have spent on purchasing a TV once-off, to spend on other important items or experiences.”
According to the NielsenIQ Consumer Outlook Survey for 2023, consumers have become increasingly cautious about their purchasing decisions. The study revealed that 70% of South Africans believe the country is in a recession, and 41% believe they are in a worse financial position than a year ago.
Across most income brackets, people are looking for ways to earn, save, and spend more efficiently. This is leading many to seek an alternative apart from cash or credit, especially when they want to experience the best and latest in high-value household goods that usually come with a hefty price tag.
Unlike a cash or credit purchase, the subscription (or rent-to-own model as it was originally termed) means that consumers pay an affordable monthly fee for access to and use of a variety of electronics, furniture, appliances, and computing products.
Customers receive, at no extra cost, benefits such as the TV licence being included on all TVs, free delivery and installation, free maintenance and risk cover (this being particularly important in South Africa), and the ability to upgrade to a bigger and newer model at any time, as well as downgrade, should the need arise.
This adds to the appeal of getting a TV on subscription as these are items the customer would have to cover themselves if they bought it from a retailer.
“Much like televisions, the ability to pay an affordable monthly subscription on big-ticket items that would usually necessitate a huge cash outlay or credit card debt for many people is part of what motivates customers to get these items on a subscription basis,” Hurvitz adds. “Product variety and price play a huge part; we offer well-known, quality brands at prices that suit most pockets and give customers the access they need to these products without putting themselves into debt or overextending their budgets.”
Choice and flexibility is key to this model, as customers can choose to own the product at the end of the term, upgrade or downgrade or, at any point should they no longer want or need what they have, they can cancel and the item will be collected at no charge. Contrary to being tied into a long-term contract, the customer has complete freedom of choice.
The subscription model provides an attractive alternative to outright purchase and means that consumers can put the power in their hands and enjoy the latest and greatest appliances, electronics, and technology, without becoming over-indebted. Ultimately it allows customers to get what they want and need, on their own terms.
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