Pegged at Rs 2,600 crore in terms of value, 85 per cent of the total sales for the air cooler industry is generated between January to June. However, due to the outbreak of COVID-19 and approximately two months of nation-wide lockdown, the industry has registered a significant loss in the sale this season.
"This year due to the pandemic and the subsequent lockdown we could not capitalise on the summer season. In India, the nationwide lockdown to curb the COVID-19 was announced at the beginning of the summer season, resulting in the loss of sales primarily in the largest contributing months for the business. We are expecting a 50 per cent decline in overall sales figures for the industry, which is quite massive considering the category is strictly seasonal," says Anuj Poddar, Executive Director, Bajaj Electricals Limited.
Commenting on the key pain points in the current situation, Poddar explains, "The business environment is quite challenging due to a variety of reasons. Initially, most of our warehouses were non-operational and our supply chain was impacted as there was a complete lockdown in containment zones and partial relaxation in a few districts/states that fall under the orange and green zones. However, in the last few days, we have seen the supply chain getting streamlined due to relaxation and we are witnessing traction in terms of sales. But with the monsoon expected to approach on time, sales opportunity for coolers will decline further."
The government had extended certain relaxation for sales of fans in April. However, similar support wasn't extended to coolers. "This category is highly seasonal and the piling up of inventory will impact the liquidity of the entire channel. We hope that the government extends relaxation to the sale of coolers in June as we are at the tail end of summer and this will help us liquidate our stocks," avers Poddar.
Bajaj Electricals has close to 15 per cent market share in the air cooler segment. "There is a huge impact in terms of sales since we have missed out on the key months that contribute heavily to the cooler segment, eventually impacting the overall growth. So, while we grew at extremely healthy double-digits over the past two years, this year is likely to be subdued," says Poddar.
In line with industry trends, the north zone generates most of our sales for Bajaj Electricals too. The company has introduced desert coolers such as Bajaj DMH95 and Bajaj DMH67, backed by consumer-relevant features like anti-bacterial honeycomb pads and powerful air delivery, which has done well for the brand. Apart from the desert coolers, tower as well as personal cooler range, are in demand.
As aspirations of people keep changing, the need for superior quality products will act as a catalyst to growth. We see some traction in the west and south zones and people are warming up to the air cooler market. One must remember that weather patterns are changing every year and today's nascent market will end up as growth drivers of tomorrow.
Bajaj Electricals had built-up stocks before the beginning of the season, i.e. March 2020 and claims to be equipped enough to cater to the current demand. "Production of coolers is planned to cater to the summer months and production schedules are aligned in that fashion. However, we are flexible in our approach and will ramp up production if there is demand," says Poddar.
Dealing with the current situation, as the company has tied up with e-commerce companies, it has ramped up doorstep deliveries of coolers outside containment zones with requisite permission. Company's after-sales support has been operating within the guidelines issued by the government and has more or less resolved consumer issues through telephonic consultations and Fix-it-Yourself mechanism. Bajaj Electricals have also extended warranties on products by two months to ease out the worries of the end-consumers. For Coolers, Bajaj has extended a 10 per cent discount on the maximum retail price on the purchases made through the official website.