Uptake in consumer durables. Consumer durables companies see massive uptake in premium category

Top consumer durables companies including LG, Panasonic and Godrej Consumer Products are seeing a significant uptick in demand for premium products.

As people stay at home for longer lengths of time it is not just housework appliances that are seeing an upgrade, rather people want their time at home to be replete with comfort.

Suguru Takamatsu, Divisional Head, CSD, CE, Panasonic India said, “Confined within homes, consumers are now opting for value proposition products that help them multi-task while adding comfort, convenience, connectivity and now, safety.” “

This is why, for LG, the contribution of premium appliances is currently in double digits, with a gradual rise in demand for their appliances across their smart 4K TVs (43 inches and above), connected range of ACs (HU series), refrigerators (400 litres and above) and washing machines (8kgs or above).

During April 2021, complaints of online e-commerce platforms running out of stock of high-end home care gadgets were common. With upper-middle-class working professionals being forced to work from home, without household help, the working elite brandished their chequebooks to make their housework more efficient. As a result, top consumer goods companies say that demand for premium category products is likely to sustain as the lockdown has slowly begun to open. Analysts conjecture that this uptick is also a consequence of pent up demand for high-end products, which is manifesting as the lockdown eases.

Kamal Nandi, Business Head and EVP at Godrej Appliances said, “During the first 20 days of July, we have seen demand in the premium segment for our appliances grow by almost twofold in comparison to general uptake in sales.”

Therefore, while sales have grown overall by 20 per cent, the premium segment has seen a 40 per cent growth. This is why Nandi believes that the premium segment will be an integral part of the growth and recovery story of Godrej. As a result, Godrej has already launched and is slated to launch a line of frost-free and 99.9 percent germ-free appliances, to cater to this high-end demand. Last week it had launched its Eon Dishwasher to automate housework for the working professional.

LG Electronics has also seen a 20 percent higher growth rate in the premium range of products in comparison to low-end products. Deepak Bansal, Head-Corporate Planning, LG Electronics India said, “In products growth of Flfully automatic washing machine is high compared to semi automatic washing machine; double door refrigerator compared to single door; bigger screen sizes compared to smaller screens. As people are spending more time at Homes they are looking to upgrade for consumer durables.”

According to Natasha Trikha, Research Analyst at Care Ratings, high growth numbers in the premium category could be a bit artificial as they are a consequence of low base effect as a result of muted demand for the premium products, during the first quarter of FY21. Moreover, the demand for premium consumer goods is likely driven by higher income groups who are likely to not care too much about the price. Thus, the pent up demand due to not being able to purchase these products during the lockdown is clearly manifesting here. In contrast, the aspirational income class will only be purchasing consumer goods that are essential and saving up money for a rainy day.

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