Consumer durables makers are gearing up for a bumper festive season ahead, expecting sales to spike by up to 35 per cent on the back of good monsoon, pent up demand and the 7th pay commission payout.
Different players in the consumer durables sector such as Sony, LG, Samsung, Panasonic, Haier, BSH Household Appliances and Videocon, are estimated to have earmarked nearly Rs 500 crore to spend on marketing to push sales during the festive period.
According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), in 2016 the industry is pinning all its hopes on the upcoming festive season wherein, “noteworthy players” have allocated anywhere between 30 to 40 per cent of their budget on marketing.
“With an overall positive customer sentiment, consumer durables companies expect to increase their sales by almost 15 to 20 per cent,” CEAMA President Manish Sharma told PTI.
To woo the customers, the companies have lined up a host of schemes, including freebies such as music system, smartphones, tablets, strolley bags, steam iron, dry iron, sunglasses, hand blenders, extended warranty and cashback on purchase of TV, refrigerator, microwave ovens, washing machine and air conditioners.
“This festive saeson, we are going to start with a very strong and positive momentum…with all the promotions, we expect at least 35 per cent growth in the panel business. Most of them would be driven by 32 inches and above,” Sony India sales head Satish Padmanabhan said.
The company has already witnessed around 25 per cent growth in sales during the Onam in Souther India this month, he added.
Similarly, LG is expecting around 30 per cent growth in sales this season as it expects good demand, especially in flat panels and home appliances segment.
“We are very optimistic about festive growth as consumer sentiment is quite positive and till now we have seen good growth. We are targeting 30 per cent growth this festive season,” said LG Electronics India Head, Corporate Marketing, Niladri Datta.
Panasonic, which has been receiving an encouraging response to its smartphones, is expecting the segment to do well this festive season.
“The sales for smartphones is expected to grow by almost Rs 600 crore during the months of September to November with a 200 per cent growth jump from what was seen last year in the segment,” said Panasonic India Head – Sales and Service, Ajay Seth.
Samsung too is expecting a double digit growth in sales this year.
“We had a healthy monsoon this year. The festive season is estimated to generate good annual sales for consumer durables and appliances. Additionally, increased rural electrification and announcement of 7th Pay Commission will be key growth drivers this season,” Samsung India Vice President, Consumer Electronics, Rajeev Bhutani said.
Bullish on festive sales, BSH Household Appliances said it expects over 40 per cent growth.
“During the festive season, consumers usually revamp and refurnish their homes as well as upgrade their appliances. In the consumer durables segment, the festive season marks one of the most important time of the year, owing to increased purchase activity and consumer inclination to spend,” said BSH Household Appliances Manufacturing MD and CEO Gunjan Srivastava.
In order to woo customers, consumer durables manufacturers are loosening their purse strings for marketing activities with industry estimate putting it anywhere near Rs 500 crore.
“We plan to spend around Rs 150 crore in terms of ATL (above the line) spend. With this, we expect to emerge as the biggest panel player in the festive season,” said Padmanabhan of Sony.
Likewise Panasonic is also ready to spend on marketing activities.
“We have set aside nearly Rs 85 crore as Festive Marketing investments towards ATL and BTL activities across India and have already started looking at focused markets. Moreover, we have also invested in manpower to spruce up our marketing activities,” Seth said.
Homegrown firm Videocon plans to spend around Rs 100 crore.
“We have earmarked Rs 100 crore for promotions during the festive season of which 1 per cent will be spent on carrying out the digital initiatives,” said Videocon Ltd Director Anirudh Dhoot.
Besides, the companies are also spending a good portion of the pie on digital platforms.
“Digital platform is certainly important and our 10 to 15 per cent spend will be on digital marketing,” said Datta of LG Electronics.
According to CEAMA, companies aren’t losing sight of the fast growing e-commerce segment.
Haier India president Eric Braganza said: “I have always considered e-commerce as another sales channel and expect them to also contribute to the festive sales”.
Expressing similar views, Sharma, who is also president & CEO – Panasonic India & South Asia, and Executive Officer, Panasonic Corporation said: “E-Commerce players too are trying hard to reap maximum traction and have decided to cut their commissions from large and preferred sellers by 30 to 50 per cent.”