The consumer durables industry is expected to see modest growth in the upcoming festival season, driven by categories such as flat panel TVs and refrigerators.
Macroeconomic factors such as a poor monsoon, low agricultural income and rupee depreciation continue to be a cause of concern for the industry. The sector typically witnesses 60-65 per cent sales from urban regions.
“The industry could see growth in the range of 10-15 per cent during the festival season,” said Kamal Nandi, Business Head and EVP, Godrej Appliances. If the next few weeks see an improvement in rural income, consumer durables firms could witness a higher growth rate, he added.
The companies saw medium to high growth, depending on the category, during Onam. Onam sales have traditionally been an indicator of consumer sentiment for the festival season.
Sanjeev Agarwal, VP - Sales, LG India, said: “We have witnessed more than 60 per cent growth in Onam sales vis-à-vis last year. While flat panel TV sales showed maximum growth, it was followed closely by frost-free refrigerators.”
Rural demand Shantanu Dasgupta, Vice-President, Corporate Affairs & Strategy, Whirlpool India, said Onam sales were satisfactory.
“We expect to see modest double digit growth during the festival season. While urban regions are expected to continue seeing demand due to replacement and upgradation of appliances, rural markets remain a cause for concern,” he said.
The companies are still deciding on the budgets for ad spend and above-the-line activities. They are expected to focus on giving value-for-money offers rather than big discounts.
“We will be focusing on pushing new technology products at competitive prices, extended warranty deals as well as attractive consumer financing options this festive season,” said Videocon COO CM Singh.
He added that the company saw high sales growth during Onam compared to last season and expects the momentum to continue during Diwali.
Margin pressure At the same time, the rupee depreciation is increasing the margin pressure.
Panasonic India & South Asia MD Manish Sharma said his company is aiming for double digit growth during the festival season.
“This season, the rupee depreciation might lead to an increase in product prices, passed on to the consumers, thereby impacting the sentiment.
“However, an immediate price rise is not on the cards,” said Sharma, who is also the president of the Consumer Electronics and Appliances Manufacturers Association.
“We received a very affirmative response around Onam and hope that it will sustain till Christmas and New Year.”