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| Great deals in a Bear hugged market |
| Priyanka Joshi / New Delhi Nov 15, 2008, 00:50 IST |
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Priyanka Joshi goes shopping for electronic bargains at a time when less is more.
A n hour-and-a-half — that’s the time Tarun Khemani has spent browsing the shelves of an E-Zone store, one which is situated on busy Grant Road in Mumbai. At the end of his “browsing exercise” he has finally decided to put his bucks on a 32-inch LCD TV. So much time spent on buying a television? “This model,” he says, pointing to the LG brand of LCD TV, costs Rs 1,000 less than a Samsung TV and is less by Rs 7,000 than similar models offered by Hitachi and Sony.”
Khemani, for the record, does not belong to that dreaded tribe of bankers that is suddenly adversely affected by the global meltdown. But even though he’s a businessman who runs his own catering business in the eastern suburbs of Mumbai, like most others he is a cautious consumer who wants to buy electronic gadgets only after much deliberation and thorough research.
Consumer electronics makers and retailers all over the world are bracing themselves for slower growth in the second half of this year and in 2009. However, they are continuing to count on consumers like Khemani who — despite tougher economic times and tighter budgets — are still waiting to bring home gadgets and other electronic items.
Rajiv Agarwal, CEO and director, The MobileStore, says, “November will be a bit slower compared to the festive month of October. We expect business to pick up again in the first fortnight of December. Christmas and New Year period too will boost up sales considerably.”
The MobileStore, for instance, is running a national promotion of an assured gift worth Rs 10,000 on the purchase of a mobile, besides various other regional schemes. “We have planned a promotion for Christmas too,” says Agarwal. Manufacturers like LG and Samsung expect sales to stay healthy as long as consumers covet flat screen high definition TVs, household electronics and keep upgrading their older gizmos.
iSuppli, a consumer research firm, forecast that the audio/video consumer electronics industry will grow to $6.59 billion by 2011, rising at a CAGR of 10 per cent from $4.5 billion in 2007. A heartening thought in an otherwise dull market, right?
Take a trip to any gizmo store and you’ll find that lower priced electronics like digital cameras and entry-level mobile phones are still disappearing off the shelves. Consumer Varsha Turakhia, for instance, grabbed the latest Videocon offer (a 32-inch Integra LCD with a Moser Baer DVD player) from At Next, a consumer electronics store in Mumbai’s Sakinaka area. “I have saved Rs 7,000 on the MRP and paid just Rs 28,990 for my goods,” she chirps. She’s deferred plans to buy the Xbox console (Rs 10,000) for her son. “I’m sure these companies will drop prices too,” she says.
For most digital camera makers, even difficult times like these have put sales on picture perfect mode. Why, instead of buying cameras only on special occasions, as has been the usual trend, people are now buying digicams on impulse throughout the year. Digital cameras are priced anywhere between Rs 6,000 to Rs 30,000, while retailers maintain that cameras priced between Rs 10,000-15,000 are the ones which continue to attract Indian customers. “We see a number young professionals buying entry level to medium priced digital cameras,” comments Ajit Joshi, CEO & MD, Infiniti Retail.
Though iSuppli estimates that consumer electronics sales will experience a “slight” but significant dip in growth next year because of a combination of factors, including market saturation, it isn’t saying it’s headed for trouble. Rajiv Nair, head (general merchandise) of Mumbai-based HyperCity Retail, agrees.
“We have seen a jump of 25 per cent during Diwali, which might not be phenomenal but is sufficiently high. In fact, home theatre systems and LCD TVs are the fastest selling items in our stores,” he says.
Though “liquidity crunch and job uncertainty will bite into electronic sales” according to iSuppli, Nair reasons that people will still upgrade their audio systems and digital cameras along with their televisions. Of course, high-end laptops, ultra mobile PCs, global positioning devices, digital camcorders and premium models like plasma screens and costlier smartphones are probably the worst affected. Experts believe that people are travelling less and opting to spend more on “entertainment” gadgets, a reason why some electronic items continue to be picked up despite the recession.
And you thought the party was over?
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