The just-concluded festive season has been somewhat chaotic for consumer durables and appliances manufacturers. No two companies agree on the performance of the sector. Some companies reported increases in both sales volume and value. Some said that only premium products were sold and the growth was modest. Still others complained that only a few categories saw an uptick in demand, and air conditioners and refrigerators were not part of the story. The signals sent out by companies and analysts are too varied to draw any conclusions about whether the boom in the consumer durables, appliances and smartphones market was over. It’s probably been a mixed bag.
“I think, sales in some segments would have been muted, some would have contracted and some would have grown unevenly. It is the context of the environment,” said Saurabh Baisakhia, president, appliances, Usha International, which manufactures food processors, microwave ovens, blenders, iron water heaters and more.
Despite improved sales, Baisakhia said that growth was “cool”. Volume growth remained in single digits. Though the price hike was in double digits, it was higher due to inflation-driven price hike by the company, he said. Typically, October witnesses a major uptick in sales as consumer sentiment from festive demand picks up. As people return to the office and indulge in serious socializing, the company’s clothing care segment, which includes dry and steam irons as well as water heaters, performed well. “Sales of both the gifting segment and the home comfort category grew, but the growth was not exceptional, as we have experienced jumps of 20-30% in the past.”
He said companies are calculating sales growth in a different way, which is giving wrong signals. While some are comparing this year’s October sales with last year’s, others are looking at the quarter. “Last year Diwali was in November, so this kind of comparison is not accurate or similar,” he added. , said that sales of televisions, washing machines and refrigerators saw tremendous growth. Unlike some retail chains, which complain of poor uptake of refrigerators, Arzoo co-founder and CEO Khushnud Khan said retailers on his platform saw brisk sales in the category despite winter setting in. Khan, who quit Flipkart in 2018 to set up his own startup, said Aarzoo provides virtual inventory solutions for electronics retailers in Tier 2 and below cities, offering the widest range of product selection and pricing offered by large online marketplaces. are unable to compete with white goods prices. The platform gives small electronics retailers access to a wide range of digital inventories across brands and product categories, which they do not need to stock to sell. Arzoo claims to have 30,000 small retailers on its platform. According to the company’s data for the festive season, cities in the western part of the country reported maximum growth in sales of consumer durables, led by Ahmednagar, Udaipur and Dhule, followed by the eastern region – Hooghly, Guwahati, Gaya, Bhubaneswar and Bhojpur. Indore, Bhopal, Gurdaspur, Kurukshetra and Moga performed well in North India. Khan said Tier-II and below cities represent potentially untapped markets with pent-up demand. A notable trend was the increase in the purchase of smart TVs, and it is not just for metro cities anymore. “Demand for smart TVs has also come from Tier 4 cities,” Khan said.
In an earlier interview to Mint, electronics retail chain Vijay Sales said that it sees both volume and value growth in this year 2021. Consumers bought bigger TV sets, microwaves, mobile phones and laptops. Sales of both entry-level and premium electronics and home appliances saw a jump.
Samsung has also projected 45% year-on-year growth in sales during the festive season and 80% growth in the premium segment. It added that while the demand for premium TVs has increased by more than 100%, soundbars have grown by 3 times. According to Cybermedia Research, the costlier smartphone fared much better. The uber-premium 5G smartphone segment ( 1,00,000) grew 170% in the September quarter compared to a year ago. Shipment for Premium Smartphones ( 25,000-50,000) and super-premium smartphones ( 50,000-1 lakh), grew by 9% and 39% respectively over the previous year.
Shuchi Bansal is the Media, Marketing and Advertising Editor at Mint. Simple post will focus on important issues related to all three. Or just fun stuff.
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