Consumer companies expect strong sales revival this festival season

Fast-moving consumer goods (FMCG), consumer durables and e-commerce companies see strong sales this festival season as the impact of the Covid-19 pandemic wanes.

While consumer durables sales picked up last year itself, FMCG companies expect a stronger revival this year compared to the 2019 festival season, aided by increased rural spending due to good monsoon rains and higher rabi crop realisations. There are expectations of a good kharif crop as well. 

“The festival season looks great and the initial feedback from markets across the country has been good. There is an uptick in both urban and rural India compared to pre-pandemic levels,” said Mayank Shah, category head, Parle Products.

Currently, Parle is seeing a growth rate of 15 per cent in value and 5-6 per cent in volume, which Shah says could go higher, to 20 per cent and 8-10 per cent, respectively, going further into the festival season.

Dabur India’s executive director (sales), Adarsh Sharma, too, expects consumer sentiment to improve towards the peak of the festival season. “Food and beverages and personal care are likely to lead the demand growth this festival season, which is expected to be higher than the previous year,” said Sharma.

Last year, the consumer durables industry witnessed a revival in sales during the festival season as markets opened up after the pandemic’s second wave. 

Samsung India says it witnessed 2x growth in premium TVs and 350-litre and above refrigerators, and 3x growth in demand for its sound-bars this Onam. The demand for its Neo QLED TVs has quadrupled since last year. “On the back of these achievements, we expect our premium segment to grow by 80 per cent and the overall consumer electronics business by 45 per cent this festival season (over last year’s season),” said Mohandeep Singh, senior vice president (consumer electronics business), Samsung India.

Fumiyasu Fujimori, managing director, Panasonic Marketing India, said: “We are expecting double-digit growth this festival season in India, primarily led by smart ACs, large screen TVs, and home appliances. I believe value growth will surpass volume growth this season. We expect to record 10 per cent overall growth when compared to last year,” he said. 

Godrej Appliances has launched over 100 new product stock-keeping units since last year’s festival season and expects them to drive the company’s sales. “This new portfolio is largely centred around premium products across categories -- from side-by-side and double-door refrigerators to top-end automatic washing machines, and advanced ACs. These premium offerings are largely ‘health first’ offerings, with patents applied for them,” Kamal Nandi, business head and executive vice president, Godrej Appliances, said. 

He added, “Coupled with consumer schemes that will enable consumers to upgrade easily, these new offerings are expected to help us drive more than 50 per cent growth this festival season.”

Avneet Marwah, CEO of Super Plastronics, the brand licensee of Kodak, expects sales to be higher by 35-40 per cent for Kodak. He said QLED TVs were already sold out, and because of strong demand and China's earlier lockdown that caused a delay in component shipments, there could be a supply shortage in the market in the last week of the festival season.

Voltas and LG India, on the other hand, expect their sales to touch pre-pandemic levels.

“We anticipate this year’s festival demand to be at par with pre-pandemic levels and contribute significantly to the overall industry growth expected during the ongoing fiscal...Till now, we have already sold 1.4 million units of ACs this calendar year, the highest in the industry,” Pradeep Bakshi, MD & CEO, Voltas, said.

Demand should continuously grow in 2022, and currently, we are witnessing good growth across categories, said Deepak Bansal, vice-president (home appliances & air conditioners), LG India. “Post-pandemic, we have seen profound changes in consumer preferences in terms of health, hygiene, and convenience through technology with increased style consciousness,” added Bansal.

E-commerce players see bumper sales

E-commerce companies reported 28 per cent order volume growth during the first two days of 2022’s festive season sale (September 23 and 24) as compared to the first two days’ sale of 2021 (October 3 and 4), according to Unicommerce. The e-commerce tech firm analysed changes in order volumes by comparing data of over 7 million orders items processed during the first two days of festive season sale periods of 2022 and 2021. 

The firm said there was over 32 per cent year-on-year (YoY) growth in festive order volumes for Tier III cities and over 20 per cent growth in Tier II volumes. It said Tier I cities reported 28 per cent order volume growth.

Personal care is the fastest growing segment with over 70 per cent YoY order volume growth during the first two days of the festive season sale of 2022, followed by the electronics segment (48 per cent YoY growth, excluding mobile phones), which is driven by audio products and smart wearables.

The fashion industry continues to be the dominant category, with maximum order volumes. It saw 7 per cent YoY order volume growth. Other segments such as home decor, gifting products, furniture, and jewellery have also witnessed strong growth.

Despite concerns around inflation and discretionary spending, millions of shoppers went online to grab special deals on offer as e-commerce firms, such as Flipkart, Amazon, Meesho, and Myntra, started their biggest festival season sales on Friday. 

The ninth edition of ‘The Big Billion Days’ (TBBD), Flipkart’s annual flagship event, witnessed the number of concurrent users on the app at 1.6 million per second. Flipkart said the number of Flipkart Plus customers using Early Access during TBBD 2022 rose as compared to last year’s event. A majority of these customers were from tier-2 cities and beyond. Flipkart Pay Later EMI saw a 12x increase in adoption. Categories like laptops, smart watches, and true wireless witnessed highest demand. The makeup and fragrance category also saw high traction, one <Kajal> being sold every second.

Amazon.in logged the highest single-day sign-ups on Prime -- 1.9x higher than last year, with 68 per cent coming from tier 2 and 3 cities. Over 60 per cent sales for Amazon Fashion came from Tier 2 and 3 cities. Amazon Business witnessed 50 per cent growth in customers and 100 per cent orders in 36 hours. Amazon Fresh grew by over 2.5x over an average business day.

Meesho said it clocked a record 8.76 million orders on the first day of its flagship sale event — the Meesho Mega Blockbuster Sale. For Meesho, this is the highest number of orders in a single day – up 80 per cent from day one of previous year’s sales. Tier 2, 3 and 4 cities accounted for 85 per cent of orders on day one of Meesho’s festival sale.