NEW DELHI :
Demand for washing machines, large refrigerators, mobile phones and small kitchen appliances continued through October, giving makers and retailers of consumer electronics and household appliances reason to believe that they will record growth over the previous festive season.
Home appliances and consumer electronics company Haier said its India business will report a 35% increase in sales in the month of October compared to a year ago period. Demand for its side-by-side refrigerators touched a record high in September, said Eric Braganza, president, Haier India. “If you compare just the ten days of Navratri and Dussehra of last year versus this year, we are up 47% as a brand,” he added. Braganza said the company will report a growth over last year for the current calendar year. “November will be huge growth, it will be better than last year as it is Diwali,” he said.
Consumers who have not faced the economic fallout of the pandemic have been saving up on several expenses such as traveling, eating out and shopping for formal wear. “Such customers are noticing that they need larger refrigerators, or better capacity washing machine or larger screen size television,” said Braganza, adding that bulk of its business still comes from offline sales. The festive months of September-to-November account for 36% of sales for the company.
India’s festive season kickstarted end August with Onam and will continue till mid-November, a little longer than the previous years. For several large appliances’ companies these months account for 30-40% of their annual business in an industry estimated at ₹76,400 crore.
Local arm of South Korean electronics maker LG reported a 30% growth in the ten days of Navratri compared to a year ago period. “There is a clear pent-up demand. The same scenario will continue and even go up further over the next two weeks till Diwali,” said Vijay Babu- VP, Home Appliances, LG Electronics India.
Babu spoke of big demand for microwave ovens and dishwashers. “That is absolutely mind blowing. Our plants are working in totally full capacity in the last two and a few months. This Diwali will be one of the best despite covid,” he said.
Not just offline, mobile phones and electronics continued to lead e-commerce sales this month. Smartphones continued to be the biggest category during the online festive sales of e-commerce firms such as Walmart-owned Flipkart and Amazon in October, accounting for 47% of the overall gross merchandise value (GMV), followed by electronics and home appliances, market research and advisory firm RedSeer said.
LG’s Babu said share of online sales has expanded for the company with an overall contribution 10-11%. Online is an emerging channel and there is a clear shift in the channel, triggered by covid, he said. The company will, however, wait and see how long consumers will stick to online sales.
Panasonic India that sells home appliances, such as refrigerators, television sets and air-conditioners, expects an average of 18% growth over last year. For some categories it could also be well over 20%, Manish Sharma, president and chief executive, Panasonic India & SA told Mint in an earlier interview.
Retailer Croma that has over 170 stores in India said its business in the days of Navratri was up 15% compared to a year ago period. “By the time Diwali has happened—my expectation is that we will be up 20% in case supplies hold. So, the growth in the market is double digit, for us because of our digital side firing better than last year, we are doing a little better, we will see 20% growth,” Ritesh Ghosal, Chief Marketing Officer, Croma, Infiniti Retail Limited said.
Ghosal said there is a strong push by the financial ecosystem to try and get people to spend. “Credit card finance has grown rapidly led by private lenders such as ICICI, HDFC, apart from SBI. “They are running very aggressive programs not just to give EMI approval but actually pushing hard to incentivize spends,” he said.
Haier ’s Braganza said that demand for zero interest has grown a little bit—we can see it. “Consumers are getting smarter with covid, they want to keep cash reserved,” he said.
The increase in demand is posing a challenge on the supply side owing to import restrictions and covid-led supply disruptions. This is especially true for open cell panels used in TV manufacturing, laptops and other supplies that companies said could lead to stock shortages closer to Diwali.