The run up to the festival season this year saw consumer durable manufacturers and retailers doing the extra bit to woo consumers by offering them extended EMI schemes, a host of freebies and much more.
There was a mood of desperation as many durable brands and retailers saw negative sales in August and September.
The good news is that Dusherra and Diwali saw a 15-20 per cent increase in sales for most consumer durable manufacturers and retailers this year, but it was lower than 27 per cent growth the industry had witnessed the year before during the festive season. Despite the growth being lower than last year there is a sigh of relief among consumer durable majors considering the severe slowdown in consumption in the preceding months.
Bulk of growth during the festival season this year has come on the back of premium products. While the entry level 32-inch TV sets didn't have too many takers, the 55-inch smart TVs did quite well. That was the trend across categories; most of the sales came from high-end refrigerators, washing machines, air-conditioners and mobile phones. "I have sold my most expensive TVs (priced at Rs 25 lakh) in Big Billion Sales," says Devita Saraf, Chairman, Vu Televisions.
"More people bought premium items, so the average ticket price went up," adds Ritesh Ghosal, adds Chief Marketing Officer, Croma-Infiniti Retail.
Ghosal says that high sales this year was the outcome of a collective effort put together by brands, retailers and NBFCs. Apart from aggressive EMI schemes, most brands priced their new launches more competitively. Apple, for instance, priced its new iPhone at Rs 58,000, almost Rs 25,000 lower than its earlier models.
Similarly, 55-inch OLED and QLED TVs that were originally priced above Rs 1.5 lakh were available this year at more affordable price-points of Rs 1 lakh.
Ghosal of Croma says that the festival season also saw the clearance of inventory of premium brands across categories, which were sold at a substantial price cut.
So, will consumer durable pricing bounce back once the economic environment improves? Saraf of VU considers this to be more of a market correction, especially in the television category. "Most of the leading brands have de-grown as they are too expensive. My 46-inch TV in 2006 was priced at Rs 2 lakh, but now it is Rs 40,000.
People want a high-end product, but they also want to replace it every now and then. With some of established brands you don't get ROI," explains Saraf who claims that Vu's sales have been growing over 20 per cent year-on-year.