For consumers holding on to their purchases for the festivities and grabbing attractive deals, cashback and pricing, the Oct-December quarter usually plays an important part in the Appliances and Consumer Electronics (ACE) industry.
Even more so this year as companies not just hope to recover the lost sales of the last year but also the bump caused by the second wave of the COVID-19 pandemic in the country early this year.
In an exclusive interaction with Business Today, Manish Sharma, President and CEO, Panasonic India and South Asia talks about the industry as well as the company's growth, market sentiment for the upcoming festive season, consumer preferences amongst others.
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How do you think the industry has grown in the last couple of years?
The ACE industry just like others had its share of ups and downs in the last two years. COVID-19-led pandemic significantly impacted the overall economy resulting in a complete whitewash of peak sales (seasons) and thus, severely denting the industry. On the positive side, confined within homes (during pandemic) consumers have now realised the importance of value-added connected (smart) appliances that have helped them multi-task. Consumers are now opting for appliances that are comfortable (easy to use), connected (smart), energy-efficient and add to overall safety.
With the unlocking of the economy coupled with positive factors such as vaccination, improving consumer sentiments, rise in first-time buyers (especially rural markets) and the onset of festive season demand for consumer appliances is on a gradual rise, especially from Tier-2 and beyond.
Consumers now are doing their due diligence (research) for value-added appliances online and, are preferring to purchase them offline. At Panasonic India, we expect the growth momentum to continue especially during this festive season. The only potential risk is the possibility of a third wave, which can derail the performance.
Amidst the COVID-19 pandemic and the second wave earlier this year, what is the market sentiment for the upcoming festive season?
We are seeing a shift in consumer behaviour from price consciousness towards quality and value proposition. There's a steady rise in demand for appliances such as smart 4K Android TVs, a connected range of ACs (HU series), refrigerators, washing machines, microwaves, and other lifestyle appliances. We are hopeful that this festive season will bring in the much-awaited festive cheer for the industry-leading towards an upward growth trajectory.
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With people moving back to their old routine, how do you think it is likely to impact the sales?
We are seeing a resurgence in demand for consumer appliances as customers are gradually returning to their pre-COVID routine as workplaces are opening too. We are anticipating stable business growth driven by positive consumer sentiments. As mentioned above, the only potential risk is the possibility of a third wave, which can derail the performance.
What kind of sales are you expecting for your consumer categories this festive season? Are you hopeful of recouping/or have already recouped the lost sales?
We have seen a growth of 25% in August 2021 vs last year. We hope to maintain the growth momentum throughout the festive season to make up for losses due to the pandemic.
What percentage of your overall sales are generated during the festive season?
Festive sales continue to be a key contributor to the overall business performance. We have already begun our festive sales with Onam and are receiving a good response. We are hoping to end the season with positive growth.
Also Read: Consumer durable industry expects double-digit growth this festive season
Where do you expect most of your sales to come from - offline or online - this festive season?
As a part of our robust omnichannel strategy, we are continuously working towards upgrading our online and offline channels to provide a better purchase experience to consumers. Although the online channel has grown, the offline channel continues to play an important role in sales.
As salary cuts and job losses have impacted the consumer segment big time, do you plan to introduce some special offers to facilitate purchases?
We have already announced our festive campaign, 'Grand Delights' for consumers. Here, we are providing promotional offers, extended warranties, attractive and easily accessible credit/finance facilities such as zero down payment, long-term EMI schemes, and up to 12 months of no-cost EMI across our value-proposition appliances.
How has Panasonic performance been in the last few years. What is your sales prediction for the coming three or four years?
Panasonic's brand performance has been at par or, more than the industry until the pandemic. In fact, in March 2021, our Invertor AC market share increased by 1.6% to 6.1%. However, the second wave of the pandemic impacted the growth.
Despite these challenges, we are cautiously optimistic. With the rise in vaccination, positive economic outlook, improved penetration in rural areas, implementation of PLI Scheme, and enhanced digital infrastructure, we hope to witness robust growth for consumer durables in the years to come.
Also Read: How Panasonic India is trying to democratise home automation
What have been the major trends you have witnessed in these years, and which amongst them, do you foresee will follow for the next two to three years? Compared to the last 2-3 years, what kind of stocks do you plan to bring to the market this year?
Consumers have now adjusted to a post-pandemic lifestyle in which safety and value proposition is taking precedence in their purchase decisions. Similarly, work from home (WFH) has made consumers realise the importance of living spaces leading them to upgrade their home automation.
Value proposition appliances that are easy to use (allowing them to multi-task), energy-efficient, connected (smart) and add to the safety, are in great demand. Keeping all those key consumer needs in mind, we had introduced our connected living platform - Miraie in early 2020. Mirai' meaning 'future' and 'ie' meaning 'home' in Japanese, aims at updating the quality of living spaces basis consumer's needs and ambient environment.
Today, under Miraie we have the widest range of IoT and AI-enabled products (smart and connected range of refrigerators, washing machine, Fans, Plugs & Switches) under Miraie platform catering to consumer aspirations for smart living. We are stocking enough inventories to meet all domestic and export demands.
Which will be your most popular SKUs this year and are you planning to introduce some new models in the market?
We at Panasonic, have already introduced our connected living platform - Miraie which will continue to be the key platform for us as we continue to add new products and solutions to it. Today, Miraie features India's largest range of connected ACs, refrigerators, washing machines, smart doorbells, smart plugsa and switches to name a few.
Second, to ensure added consumer safety, we had launched nanoe TMX Air Conditioners in India that are capable of inhibiting 99% of bacteria and virus including adhered coronavirus. These Miraie enabled, nanoe TMX air conditioners are receiving a positive response and are in great demand.
Similarly, we continue to launch our value-proposition products such as the latest range of Smart 4K Android TVs such as JX and JS models, Monster Mixer grinders and soon we will launch a new range of refrigerators and washing machines.
Has the global semiconductor shortage impacted your production and will dampen the festive projections?
At Panasonic, we have sufficient inventory to cater to our consumers throughout the festive season.
With a lot of competition, how are you looking at differentiating yourself?
The consumer durable industry is observing a technological evolution due to the pandemic that has accelerated the adoption of IoT-enabled appliances. The concept of 'home as the new hub' is encouraging consumers to upgrade their living spaces to ensure comfort and safety.
We are looking to democratise technology and with Miraie, we aim to bring down the total cost of ownership as the platform sends users regular notifications for servicing requirements driving optimum output and efficient performance over time. With Miraie, we are the single entity that offers an expansive range of connected products, including consumer durables, smart fans, smart lighting, switches, etc.
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