Festival sales to help consumer durables sector pare down lockdown losses

Meenakshi Verma Ambwani New Delhi | Updated on October 26, 2020

The consumer durables industry has been witnessing encouraging signs of revival since August   -  Bijoy Ghosh

Industry players say early signs have been encouraging especially in the home appliance segment

After the critical summer season for cooling products was adversely impacted due to the nationwide lockdown, the consumer durables industry is banking on the festival fervour to recoup some of the losses made in this pandemic year.

Industry players said that early signs during the 10 days of the Navratri and Dussehra period have been encouraging especially in the home appliance segment.

Also read: What consumers will buy this festival season

Vijay Babu, Vice-President, Home Appliances, LG Electronics India, said, “Looking at early trends, we anticipate to see a growth of over 30 per cent in the October-November festival period compared to same period last year. Consumers are upgrading to high-end and high-capacity products in segments such as washing machines and refrigerators besides there is also an uptick in demand for microwave ovens and dishwashers.”

The industry has in fact been witnessing encouraging signs of revival since August. However, industry players pointed out that given that April-May period, which is crucial for ACs and refrigerator sales, was a complete washout due to the nationwide lockdown, the sector will at best narrow down its losses due to the festival season push.

Festival push

A senior industry executive pointed out that the industry was earlier staring at a degrowth of nearly 30 per cent for the year, with the festival season demand push, the industry is now expected to narrow it down to a degrowth of about 12-15 per cent.

Also read: Government’s LTC cash voucher scheme: Consumer durables, retail firms to see demand boost

Kamal Nandi, Business Head & Executive Vice-President, Godrej Appliances, said,“We have seen a growth of 15 per cent in the Navratri and Dussehra period, which gives us the confidence that demand will continue to remain strong in the upcoming days and we will close the overall festival season, with double digit growth. We are also seeing good rural demand as normal monsoons boosted agricultural output and several firms have reversed pay-cuts in urban region. In addition, consumers are upgrading home appliances to enhance their lifestyle as they stay and work from home.”

Slew of offers

Consumer durables players are focussing on various festival season offers such as cashbacks, longer warranties and longer tenure financing schemes to woo consumers.

Eric Braganza, President, Haier India, said, “While there is a section of consumers that have indeed witnessed pay cuts and job losses, but there is also a large section of consumers, who are working from home, and have reduced their expenses on eating out and other such leisure activities. Such consumers are instead looking at putting their spends on upgrading their home appliances.” He added that the company expects to close October with 35 per cent growth over the same period last year.

However, retailers also pointed out to challenges in terms of supply constraints in segments such as laptops, TVs and high-end durables product due to curb on imports and challenges with sourcing components.

Nilesh Gupta, MD, Vijay Sales, said: “We saw positive sale trends during the 10 days of Navratri and Dussehra and witnessed a growth of 3-4 per cent over the same period last year. It could have been much higher if there weren’t supply constraints in certain segments. We are seeing an increase in ticket size of home appliance purchases by 10-15 per cent, which is a positive sign.”

Published on October 26, 2020

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