With dampened rural demand, consumer good companies are expected to shift their priorities towards the urban markets with new offerings in the premium segment this festival season.

Consumer durable makers such as Godrej, Videocon and Mirc Electronics will be targeting urban consumers through high-end products, luring them with attractive schemes and warranties to ensure sales this season.

“We do not expect rural demand to pick up during the festival season since there has been a monsoon deficit. With growth coming from the urban markets, our focus will be towards premium products with brands such as NXW and Eon range of frost-free refrigerators and washing machines, with more price-offs and exchange offers,” said Kamal Nandi, Executive Vice-President, Godrej Appliances. The consumer durables major is planning to give a ₹7,000 discount on off-season categories such as air-conditioners during the festival season to spur urban sales.

Meanwhile, Videocon Industries, which typically garners nearly 75 per cent of its sales from rural markets, plans to woo urban consumers with attractive warranties. For the first time, it is offering a “comprehensive” five-year warranty scheme for its high-end television sets in the 32- and 40-inch categories.

“Finance is more easily available to urban consumers than their rural counterparts and today warranty is the important factor in the consumer durables category. “For the first time we are planning to extend our normal one- and two-year warranties to a five-year comprehensive warranty scheme, which is going to be a game changer for the industry,” said CM Singh, COO, Videocon Industries.

Mirc Electronics, the makers of the Onida brand of televisions, has made alternative plans for its rural-specific durable brand Igo. “Our Igo brand of panel TVs is now targeted at the urban markets. We do not sell any of our panels in the rural market anymore with agricultural incomes being hit.

“This festival season we will focus on our smart TVs, since these are advanced products meant for the urban markets,” said Gulu Mirchandani, CMD, Mirc.

Unlike consumer electronics, mass market FMCG products are not likely to witness much difference in demand in rural and urban markets. For instance, ITC does not want to differentiate between the two markets during the festival season.

Said VL Rajesh, Business Head, Foods, ITC: “In our configuration, sales growth in both the urban and rural markets has been similar. While industry data does suggest rural markets have slowed down, our focus will be pan-India during the festival season with more premium products targeted at the urban markets along with the usual gift packs like biscuits that we usually dole out during the festival season.”

Pick-up hopes Analysts, meanwhile, remain hopeful of a pick-up in rural demand in the second half of the year. G Chokkalingam, founder of research firm Equinomics, said: “I am more bullish on the second half as macroeconomic indicators are improving and interest rate cuts transmitted by banks should help improve consumer spending.”

(With inputs from Priya Kansara)

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