Durables makers expect better festive season sales this year

After a gloomy period last year, consumer durables makers are preparing for better sales in this year’s festive season.

Large consumer electronics and appliances fared well this summer, such as televisions (TVs), air conditioners (ACs) and washing machines (WMs). Implementation of the pay commission recommendations and its arrears to the estimated 10 million central government staffers and pensioners are expected to boost sales from September. And, above average rain in large parts will give a long-awaited respite to sellers in the rural markets.

In 2015, the monsoon remained below average, after failing in 2014. Sales in rural markets, as a result, had suffered from lack of enough income among households. Last year, sales of ACs, TVs and other appliances went down for many major entities.

SILVER LINING

• Implementation of the seventh pay commission recommendations are expected to boost sales from September
   
• Above-average monsoon to give respite to sellers in rural markets
   
• In 2015, below average monsoon had resulted in low sales in rural areas
   
• Sales of ACs, TVs and other appliances had also gone down in 2015
   
• Durables makers are gearing up with new range of products, financing schemes and offers for this festive season
   
• About 40 consumer durables makers to benefit, as sales are expected to grow by 20% between September and December
   
• Good sales in festive season are crucial for many companies, as these account for 30-35% of the companies’ total yearly sales

According to Y V Verma, a sector expert, formerly with LG Electronics and Onida, the expectation this year is for average sales growth across categories of at least 15-20 per cent. “The overall sentiment is also improving, which should aid sales,” he said.

Companies are also gearing up with a new range of products, financing schemes and offers. Videocon, Whirlpool, BSH Home Appliances and Panasonic have started bringing a new range of TVs, refrigerators, WMs and microwaves, catering to all price segments. A majority of the products are aimed at consumers looking for mid-range and semi-premium appliances.

Chandramani Singh, chief operating officer at Videocon, says during the festive season, consumers tend to buy appliances which are slightly premium in terms of price and quality. Products from the basic ranges sell more in the first half of the year.

Better availability of consumer financing schemes have also helped of late, says Kapil Agarwal, vice-president, marketing, Whirlpool of India. Apart from new ranges of WMs and special offers for Diwali, it is working to increase on-shop activities. “Most of our advertisement and promotional resources will be spend on ground-level promotions,” he said.

Eric Braganza, president, Haier Appliances, said: “The emphasis will be on categories such as TVs, refrigerators, WMs, water heaters and air purifiers. Home furnishings, mobile handsets, apparel, accessories and jewellery will also compete for share of wallet and so, consumer durables and electronics are expected to raise the marketing pitch this year, to draw the attention of consumers.”  

According to Kamal Nandi, executive vice-president and business head, Godrej Appliances, the offtake of premium products will be more this year as purchasing power of consumers is expected to grow. “While the rural market will see consumption of necessities after two years of drought, urban areas will see consumption for lifestyle enhancement.”

BSH is preparing a new range of cooking appliances and refrigerators, and special financing schemes, by December, said Gunjan Srivastava, managing director. Videocon has readied a range of LED TVs, WMs and refrigerators in the premium to semi-premium price categories. It continues to sell CRT TVs in the rural markets of West Bengal and Odisha. However, given the trend of consumers moving towards higher value products, the company is strengthening its portfolio in the above-entry level segments.