Financial Daily from THE HINDU group of publications
Saturday, Oct 22, 2005
Financial Daily from THE HINDU group of publications Saturday, Oct 22, 2005 |
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Marketing
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Promotions & Offers Industry & Economy - Consumer Electronics Consumer durables sector sees pick-up in sales Neha Kaushik
New Delhi , Oct. 21 AFTER a subdued six months, the consumer durables sector seems to be springing back to life again. Major consumer durable manufacturers said that with the festive season kicking off across the country, there has been a pick up in sales across all segments. In fact, having rolled out high decibel promotions, most companies are sanguine that the next 2-3 months would help the industry to end this fiscal with about 8-10 per cent growth. "We expect consumer durables sales to increase by about 25-30 per cent during the festive season. There is no reason why sales should not step up as all the economic indicators are pointing in the right direction. Further there has been significant price erosion this year, with prices of, for example, flat CTVs declining by up to 20 per cent," Mr Girish Rao, Vice-President - Sales, LG Electronics India, said. An official from Samsung India pointed out that sales have stepped up since the Navratras, with high-end products such as frost-free refrigerators and flat colour televisions being growth drivers. Owing to factors such as the implementation of VAT and weather conditions impacting sales in the western States, consumer durables sales had been stagnant since April this year. "However, it is only colour televisions which are not doing well. This segment first got hit due to VAT, and the following months of May-July usually do not see volumes for CTVs as they are traditionally key months for categories such as refrigerators and air-conditioners. CTV sales would step up during the festive season," Mr Rao said. According to industry data, CTV sales declined by about 8.5 per cent during the April-August 2005 period. Sales of flat CTVs, however, grew by about 46 per cent in the period. Industry analysts point out that for the CTV segment the next 15-20 days are extremely crucial and the target of reaching 10 million units this calendar year would hinge on it. "CTV manufacturers have built up a lot of inventory in anticipation. The market meanwhile has started to report movement of goods," an official from the Consumer Electronics and Television Manufacturers Association (CETMA) said. The industry, meanwhile, has rolled out aggressive promotions focusing on giving assured gifts with every purchase to the consumer as well as an opportunity to win bumper prizes. "The focus is on providing value with every purchase. In fact, this time around, companies which are not providing gifts with their products are offering cash discounts at the retail level," an industry analyst points out. According to estimates, the industry is spending about Rs 200 crore towards festive promotions this year.
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