Durable majors see big jump in sales amid festive cheer

By Arnab Dutta , Business Standard, New Delhi | In Marketing | October 06, 2016
Most home appliances and consumer electronics firms eye 30% growth this season.

After witnessing two years of subdued sales, consumer durable firms are expecting better sales this festive season. Going by the buying trends recorded in September, these firms are anticipating robust business in the coming weeks.

Most home appliances and consumer electronics firms are eyeing a 30 per cent growth during this festive season, compared with the low double-digit growth observed last year. According to industry estimates, the consumer durable sector is to grow 20 per cent in sales during the September-December 2016 period. Typically, this period generates above 35 per cent of sales for major companies in the sector.

According to Anirudh Dhoot, director, Videocon, the firm has launched 20 new products across television, washing machine, air conditioner and refrigerator segments to boost sales. "We will be also announcing an array of customer-centric offers and make their festive purchases worthwhile. With these measures, we're targeting an overall 30 per cent sales growth across categories over last year," he said.

While appliances major LG is expecting to grow by a healthy double-digit percentage figure, Panasonic and Haier have set their eyes on sales growth in excess of 40 per cent this season. According to Eric Braganza, president, Haier Appliances India, the firm has posted more than 50 per cent sales growth during September. "Onam gives us the indication of the sales ahead and this year sales were phenomenal," he said.

To strengthen its distribution, LG India has expanded its technology skill development programme this year to 15 cities across the country, months ahead of the festive season. Earlier, the firm used to hold one such programme in Delhi.

According to Niladri Datta, head of corporate marketing at LG India, the firm is focusing heavily on premium and super premium products. Apart from promoting products through print ads, LG has launched an experiential marketing programme for its super premium range, under which potential consumers get to use the products before a purchase.

Sales this year started growing early thanks to a very hot summer, leading to higher sales of air conditioners and refrigerators. As the year progressed, various factors have worked in favour of the consumer market in India. A better monsoon has increased farm production and helped bring back purchasing power to rural consumer to some extent. Also, payment of arrears, salaries and pensions according to the 7th Pay Commission scale boosted urban market sentiments.

Companies are also hopeful that the repo rate cut that has been announced recently will bring down the effective interest rate and will benefit the sector further in the coming months.

While Godrej Appliances has allocated Rs 60 crore as its promotional budget for this festive season. Japanese electronic major Panasonic allocated Rs 84 crore on that front.

Godrej is expecting to touch Rs 4,000 crore in revenue by March 2017, backed by 30 per cent growth in sales during the festive season. Godrej posted Rs 3,250 crore sales during 2015-16.

Panasonic is focusing on field-level activities based on its branded outlets in the country, apart from boarding ads and TV commercials, said Ajay Seth, head of sales and service at Panasonic India.

Small appliances player Usha International is tying up with large retail chains such as Croma and Reliance Digital. The firm has increased its retail touch points to 827 from 600 two months ago. To expand its rural reach, Usha is opening 50 new branded outlets. It has also started selling on Amazon.

The sector is to grow 20% in sales during the Sept-Dec 2016 period

• Companies hopeful of breaking the subdued trend of the past two seasons as sales surge high in September

• Firms hopeful of higher sales in coming months after the recent repo rate cuts which may bring down effective interest rate

• Durable majors posted above 25% sales growth in the past weeks starting Onam

• Better monsoon led to higher farm production and increasing purchasing power of rural consumers

• Higher government salaries and pensions under the Seventh Pay Commission role have boosted urban-led consumption