The appliances and consumer electronics industry is expecting double-digit growth in sales in the upcoming festive season, which will be further supported by absence of domestic helps and people working from home, according to industry body CEAMA.
According to a PTI report: The consumer electronics and appliances sector, which has already started on a positive note with Onam in August, saw sales growth in last couple of months owing to pent-up demand, but there is another element playing a role of a key driver, i.e. consumers are looking for a substitute for domestic help amid health safety concerns due to COVID-19.
This has already led to a higher demand for appliances such as washing machine, microwave, dishwasher, refrigerators, etc,” the Consumer Electronics and Appliances Manufacturers Association (CEAMA) said.
Though, the industry is optimistic, the retailers are cautious as scheme and promotions might not be as aggressive like earlier in this year in the festive season, which roughly accounts up to 25 percent of the total sales, as the brands are struggling with liquidity and other challenges.
Makers such as Panasonic, LG, Samsung, Sony, Voltas and BSH Home Appliances are expecting a higher demand of new-age premium products such as large screen TV and big size refrigerators besides dishwasher, microwave ovens and washing machine — which have proved their worth during the lockdown.
“With Onam, we have kick-started the festive season on a positive note. The work-from-home and stay-at-home factors have given a buoyancy to our television, home audio and personal audio business with about 20 per growth in these segments versus last year,” Sunil Nayyar, Managing Director, Sony India told PTI.
The company has consumer promotion offers for Durga Puja and Diwali, which are just around the corner and is hoping such positive growth momentum will be sustained throughout the festive season.
Panasonic has recorded 18 percent growth in the Onam festival season sales in August this year over the same period last year.
“l believe this will continue to remain the trend for the upcoming festive season and near future. Consumer durable industry witnessed a loss of around 20 per cent during the past few months; this festive season we are hopeful of recovering some of the losses,” Manish Sharma, President & CEO, Panasonic India and South Asia told PTI.
Expressing similar sentiment, South Korea major LG expects 30 percent growth this festive season.
“We are optimistic about good growth in overall business and targeting 30 percent growth in the festive season. We have launched a range of flagship models and consumer experiential sessions are planned,” Vijay Babu, VP Home Appliances, LG Electronics told PTI.
CEAMA said that the industry has overall witnessed a growth in sales of consumer electronics and appliances in August. In July, the growth was only in the consumer electronics.
“All these are led by not only led by pent up demands and rural sales but there is a third element, which is playing as a higher factor in demand. This is about new trends, where the consumers are looking for a substitute for domestic help and appliances as washing machine, microwave, dishwasher, refrigerators are filling up the gap,” Kamal Nandi, President, CEAMA told PTI.
Since unlocking of markets, there has been an increased demand among consumers to equip their homes with the latest technology while they stay and work from home, said Samsung India.
It has witnessed a strong double-digit growth across cities in sales of larger screen TV and refrigerators of 300 litres and above.
“Riding on these factors, this festive season, we expect strong growth to continue, especially in mid and premium segments of the market,” Raju Pullan, Senior Vice President Consumer Electronics Business, Samsung India told PTI.
Tata group firm Infiniti Retail, which operates consumer electronics store chain Croma, is quite optimistic about the festive sales based on the performance for August, in which the company has grown 20 per cent over the last year.
“Even in the month of Shradh (not considered as good months for buying new products), which is presently going, we are having a good growth,” Ritesh Ghosal, CMO, Infiniti Retail told PTI.
However, he further told PTI: “There are shortages in most product categories starting with phones, laptops and TV also… Brands are struggling to give us stock. The festive scheme and promotions etc might not be as aggressive as the normal they are because of short of stock.”
The biggest challenge for brands is liquidity and cash flows because of the current economic scenario and prevalent job cuts and salary reduction, said CEAMA’s Nandi.
“If we address those challenges, the consumers will buy, because they need these appliances,” he was quoted by PTI as saying.
Companies such as Voltas is coming with offers like cashback, extended warranty, installation packages and exchange offers, and has also launched new products during the festive period.
“This festive season, Voltas is geared up with a combination of exciting cashback offers, extended warranty, installation packages and exchange offers, in order to make the buying process more easier for our customers…,” Pradeep Bakshi, Managing Director and CEO, Voltas told PTI.
BSH home appliances, which manufacture and sells under Bosch and Siemens brands in India, said despite the pandemic and changing economic environment, it is expecting the consumer sentiment and sales to be positive.
“We are expecting a similar demand during the festive period as well. In this period, we will also be offering consumers lucrative offers across Bosch and Siemens products, starting from cash back vouchers, finance and EMI options, smartwatches and exchange offers,” Neeraj Bahl, MD and CEO, BSH Home Appliances told PTI.
According to a joint report by CEAMA and Frost & Sullivan, the appliance and consumer electronic industry had a total market size of Rs 76,400 crore in 2018-19.