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Samsung’s senior vice-president Mohandeep Singh is familiar with festive rush and sleepless nights that come with it. But the demand for premium smart phones he’s witnessing this year is rather unusual. In spite of an overall economic downturn, the company’s premium handset sales have been robust in October.
With a surge in the share of premium portfolio, Samsung is not only expecting to achieve a 40 per cent growth in sales this season, its overall average selling price or ASP is now growing faster than ever, according to Singh. “The mass and mid-segments are also growing reasonably well, while our premium portfolio is growing at a faster pace,” he said.
Other business executives in the electronics industry are also watching the trend. President and chief executive of Panasonic India and South East Asia Manish Sharma said the brand had so far registered 30 per cent growth in festive sales. This was backed by strong consumer durables numbers. “Demand for LED TVs has surpassed the supply. While earlier, small size appliances such as grooming products, audio accessories were preferred across online purchase, this year we have seen a significant increase in demand for large appliances such as refrigerators and washing machines,” he pointed out.
It’s a similar story for consumer electronics major Sony India. The company’s recording an exceptional growth in the 55 inch and above TV segments. ‘’We have observed a compelling behavioural change in customers’ buying pattern which is now more tilted towards the large-screen segment, especially 55 inch and above televisions due to stay-at-home environment,” said Sony India managing director Sunil Nayyar. He expects the trend to continue at least till Diwali.
Samsung India senior vice-president for consumer electronics business Raju Pullan is of the view that consumer preference has shifted towards premium products. Like Sony, Samsung too has registered better growth in 55-inch or larger screen TV sets, bigger refrigerators, fully automatic washing machines and microwave ovens. According to Pullan, the convenience factor played a key role in this surge. “Our premium segment grew by 50 per cent starting early October when we launched our festive promotion."
Whirlpool India MD Vushal Bhola explained that with more time spent at home, consumers are willing to invest more in appliances that make their daily lives easier. “Consumer durables have moved from a passive to an active space, enabling daily household chores and supporting everyday care,” he said.
While consumers confined to home are driving sales of appliances and audio products, online learning and remote working culture are fuelling the growth of superior quality tablets and notebooks, analysts believe.
The pre-orders for Apple’s iPhone12 too captured the trend. The largest company in the luxury segment for smartphones and notebooks recorded close to 25 per cent higher pre-orders for the iPhone12 range. Priced at least 15 per cent higher than last year, it has received over 100,000 pre-orders for iPhone 12 and 12 Pro. In the September quarter, the firm recorded the highest ever sale in India led by MacBook and a record 800,000 iPhones.
LG too is in the midst of a good festive season with a 31 per cent growth in sales so far. “We are seeing good demand in the replacement market and premium products, especially premium refrigerators (above 300 litres) and high-end washing machines. Also we have witnessed high sell out for microwave ovens and dishwashers,” said LG Electronics India vice-president for home appliances Vijay Babu.
Industry leaders are hoping that the extraordinary festival demand for premium products would translate into a sharp rebound that stays on.
