Companies

Consumer-durable majors not sold on e-commerce

Purvita Chatterjee Mumbai | Updated on January 16, 2018 Published on October 26, 2016

Unlike categories like mobilephones and apparel, durables such as home appliances do not register significant uptake online   -  Shutterstock.com

Do not expect to generate more than 10% of sales online even during festival season

Major consumer-durable companies are not comfortable with predatory pricing of e-commerce players during the festival season, nor do they expect sales from online channels to exceed 10 per cent of their current revenues.

For most consumer-durable players, sales from e-commerce remain negligible. Unlike categories such as mobilephones and apparel, which see a peak in sales during the festival season, durables such as refrigerators and washing machines do not register significant uptake online.

“While we have created different SKUs (Stock-Keeping Units) for refrigerators, washers and air conditioners specifically for selling through e-commerce platforms, online sales for the appliance industry is still small at 7-8 per cent, compared with other categories such as garments and apparel; it will remain that way even during festival sales,” observes Kamal Nandi, Business Head, Godrej Appliances.

Others like Videocon have also not gone online in a significant way on their own, and are against discounting their brand through other e-commerce sites.

“We do not directly sell anything online; the products are picked up by consumers from marketplaces such as Flipkart and Amazon where we have no control over pricing,” says CM Singh, COO, Videocon Industries.

Just an additional channel

International brands such as LG, Haier and Panasonic also regard e-commerce as an additional selling channel, but do not depend on it to generate significant sales.

“While we are working on an e-commerce strategy, LG sells almost nothing through e-commerce. We are concerned about the steep discounts being offered through marketplaces and want to create specific products for e-commerce players in future,” says Niladri Datta, Corporate Marketing Head, LG.

Others like Haier, while not dealing directly with e-commerce players, expect to create specific SKUs to sell products online without any significant surge in sales. “While absolute sales may be up during the festival season, e-commerce contributes about 4-5 per cent of it. Sales from e-commerce remain incremental at a few percentage points and would maximum go up to 7-8 per cent of revenues even in the long run,” says Eric Braganza, President, Haier Appliances.

Even Panasonic is not too enthusiastic about online sales contributing significantly in future. Gaurav Minocha, Head - Home Appliances, Panasonic, says: “The offline channels tend to suffer if e-commerce players give discounts, which are more during the festival season. While there are dealers who directly put our products on e-commerce sites, we also do it ourselves; but we do not see sales from online going above 10 per cent.”



Published on October 26, 2016
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