The festive sales for consumer electronics and durables, which commences with Onam in Kerala first, followed by Durga Puja, Navratri, and Dussehra - ending with Diwali in October, usually comprise around 30-40 per cent of the sales across the industry. After a two-year hit owing to various reasons including Covid-19, supply chain issues and rising input costs, the industry is hopeful of bumper festive sales, and if not more, matching the pre-pandemic levels.
“It is an accepted fact in our industry that July, August, and September are one of the weakest months of every year. Then there are different festivals spread across the year where there is an uptick in consumer demand and the sales see an upward trend. Moreover, since everything is, fortunately, getting back to normal this may have a positive shift in consumers' purchases,” says Eric Braganza, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA).
Festivals make up the heart and soul of Indian communities. And brands have started witnessing an upsurge in the demand already. For instance, starting with Raksha Bandhan, Onam, and Ganesh Chaturthi, Usha International has started registering good demand for appliances, and this will lead to Durga Puja, Navratri, Dussehra, Diwali, and Gurupurab, and Christmas in December. “It is safe to say that this season is most critical for consumer durables majors like ours. We have already begun preparing our logistical strategies in order to cater to the demand and we expect an increase of 25% (Y-O-Y) in our overall sales/revenue during H2 this year,” says Saurabh Baishakhia, President – Appliances, Usha International.
Similarly, festive sales usually comprise around 28 – 30% of the annual sales for Godrej Appliances. “This year in Q2 FY 22-23 during Onam festivities we are targeting 30%+ growth over last year as well as pre-pandemic,” adds Kamal Nandi, Business Head and Executive Vice President at Godrej Appliances, part of Godrej & Boyce.
Health & Hygiene features driving demand
With the overall market sentiment looking better, Voltas is anticipate this year’s festive demand to be par with the pre-pandemic level and will contribute significantly to the overall growth expected during the course of the fiscal. However, the company is witnessing a surge in demand for products with advanced health and hygiene features that offer convenience and comfort to customers, who are navigating work and household responsibilities. “In terms of specific categories of products, a surge in demand will be seen in our all-weather air conditioners, the PureAir AC range with HEPA filter technology, and also our range of home appliances like refrigerators and washing machines with advanced fresh-tech features,” says Pradeep Bakshi, MD&CEO, Voltas Ltd.
Deepak Bansal VP, Home Appliances & Air Conditioners, LG India echoes, “Last 2 years were quite challenging due to pandemic, however, due to increased sensitization on health & hygiene, we could see good growth in products like dishwashers, microwaves, bigger capacity appliances like refrigerators, washing machines. There has been a significant increase in the demand for solutions that adds convenience to their daily lifestyle & enhance Health & hygiene.” For LG too, around 30% of the sales come during the festive season.
Offline sales to pick up
Given that the worst of the pandemic is behind us, and especially after two years of being confined to homes, CyberMedia Research (CMR)’s channel pulse point to renewed optimism amongst the Indian retailers as well as the Indian consumer. And while both channels, offline and online - are significant for overall sales, brick & mortar remains a significant channel in consumer durable sales. There was a dip in offline retail in the last two years due to the pandemic, but with everything moving back to normal, the share of sales from offline retail is likely to pick up once again.
“We foresee offline retail making a strong comeback, and posting healthy growth alongside online channels this festive season. Amongst consumers, the luxury buyer will be spoilt for choices, while the value-conscious buyer will benefit from an array of affordability initiatives across the segment,” explains Prabhu Ram, Head- Industry Intelligence Group (IIG), CyberMedia Research (CMR).
With consumers expected to flock to offline stores for the look and feel, brands are working towards enhancing their in-store shopper experience across company-owned stores as well as retail partners across the country.
The state of the Economy plays a role
While the companies are optimistic about the upcoming festive season, a lot will depend on the state of the economy as well. Nandi of Godrej says that the festive target setting for the larger country will depend on how the monsoons fare overall and the consumer sentiment over the next month or so. “We are cautiously optimistic as far as the mass segment is concerned but the premium segment is expected to continue doing very well in festive as well and will form the focus across categories,” he says.
But thankfully, even with the rising inflation, depreciating rupee value and fear of recession mounting, the consumer sentiment is still on the positive side. “Despite the negative sentiments, the industry is hopeful for a positive festive season ahead. After a prolonged lull period, consumers too are looking forward to the upcoming festive season starting from Onam. They will continue to spend cautiously on connected (smart), convenient and comfortable appliances,” explains Fumiyasu Fujimori, Managing Director, Panasonic Marketing India. Panasonic India is targeting double-digit growth in the festive season reinforced by smart ACs and the home appliances category.
Furthermore, given the increasing relevance of rural towns and their rising contribution to rising sales of branded, high-quality home appliances, Usha is working with its distributors to ensure last-mile connectivity during the festive season. “Penetrating into the hinterlands of India is sure to open up new growth avenues for businesses, as rural is pegged to be among the primary drivers for economic development and progress this year,” adds Baishakhia of Usha International.
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