Diwali lights up durables sales

Written by Yogima Seth | New Delhi | Updated: Oct 17 2009, 05:11am hrs
Consumer durables companies are making money like never before. Several new launches along with festive schemes have helped major consumer durables companies like Samsung India Electronics, Godrej Appliances and LG Electronics India exceed their growth targets for September.

The company had set a target of doing business worth of Rs 1,700 crore in September and October which was a growth of 35% over the same period last year. However, we grew by 35% in September and considering that 70% of the expected October sales has already happened in the first 15 days, we expect to close October with over 40% growth vis--vis last year, R Zutshi, deputy managing director, Samsung India, said, adding that this would be highest ever by the company as the business is growing year-on-year. In fact, the assured free gifts and new range of products in the LCD category have helped Samsung achieve 70% of its targeted October sales in just 15 days.

This comes on the backdrop of higher spend by all these companies on promotional activities during these two months to bring back buoyancy in the market. While Godrej Appliances has increased its festival spend this time by nearly 60% from Rs 20-25 crore in 2008-09 to Rs 35-40 crore this year, Samsung has set aside Rs 25 crore for gifts that would be distributed as part of the promotional schemes.

In September itself, the company has exceeded its set growth target of 30% as we grew by 35-36% last month and since we expect similar or even higher sales in October, we are on our way to achieve a turnover of Rs 600 crore, which would be 30% higher than last year, Kamal Nandi, vice-president, Godrej Appliances said.

According to estimates by Consumer Electronics and Appliances Manufacturers Association, the festive season which extends from September to November, accounts for around one-third of the total sales of Rs 35,000-crore domestic consumer durables market. This translates into Rs 12,000 to Rs 15,000 crore in three months.

Durables industry has been witnessing favourable growth this year. We see our business growing at 25% this year, which would accelerate to over 30% during festive months , V Ramachandran, director (sales and marketing), LG Electronics India said.