Festivals no longer only time to buy

Written by Neha Pal | Neha Pal | New Delhi | Updated: Oct 8 2010, 19:29pm hrs
With disposal income going up, consumers have been spending on electronic goods round the year. This has taken the spark out of the festive season for the consumer durable sector.

In the coming Dussehra-Diwali festive season, leading durable companies are not expecting substantial jump in their sales. In fact, electronic majors including Panasonic, Onida and Samsung have already managed to meet at least 60% of their sales target for the current year even before the festive season sets in which was not the case a few years ago, they said. For Panasonic, the three month sale (September, October and November) in 2007 comprised 45% of their annual sales. Last year, it came down to 35%. This year, Panasonic hopes to achieve the same level of sales as last year. Panasonic's sales target for this fiscal stood at Rs 3,200 crore. The company has already achieved 50-55% of its target.

Same is the case with Samsung. The consumer electronics festive share for Samsung stood at 22% of the total sales in 2007, 24% in 2008 and 24% in 2009. We are not expecting a rise even this year and the sales from these three months is expected to be around 24% of the total sales, Ravinder Zutshi, deputy managing director, Samsung India said.

Even the home-grown electronics firm Onida expects the 2010 festive season to contribute only around 25% to the annual sales. Three years ago, the festive seasons contribution was around 30% to the annual sales turnover. According to Sriram Krishnamurthy, vice-president, sales, marketing & services, Onida, Onida's sales target for FY10 has been Rs 2,200 crore and we have been expecting a 35% growth this year. Our pre-season sales have been quite good and we are growing at 30%.

Explaining the reasons for this shift in spendings during festive season, Manish Sharma, director- marketing, Panasonic said, If a customer wants to buy a 19 inch LCD worth Rs 11,900, he no longer has to wait for Diwali to get his bonus. The purchasing power of the customer has increased over the years and buying on installments is the latest trend.

According to Ashish Nanda, partner, retail & consumer products practice, Ernst & Young, it is a combination of the high disposable income and the offers given by companies all around the year. The schemes offered by consumer durable companies keep happening after every two months. The trend has changed and it is not the same as it used to be earlier when it was restricted only to a particular season.