Manufacturers and retailers of appliances and electronic products are counting on the upcoming October-November festive period for a big boost in sales. Expectations are running high after a good Onam season in Kerala, which saw a sales growth of around 23-25% in home appliances and electronics, according to executives at top durable companies.
Firms are expecting at least a 20-25% year-on-year sales growth in October-November, when Dussehra and Diwali will be celebrated. This will likely be the strongest period after two difficult quarters, which was marred by weather certainty.
While April-June saw unseasonal rains, hurting sales of cooling products; August-September has seen erratic monsoons, hurting rural demand. But urban areas have been holding up well from a demand perspective, senior executives said. Categories such as frost-free refrigerators, automatic washing machines, split air conditioners saw a year-on-year growth in the region of 25-30% during Onam in contrast to mass categories, which saw mid-single digit growth (5-6%).
“The festive season in October-November should be good, if Onam is an indicator. We saw nearly 25% year-on-year growth during Onam this year, which was led by the premium segment. Premium products grew by 30% versus last year across home appliance categories. We expect a 20-25% overall growth during the Dussehra-Diwali period as the momentum is likely to continue,” Kamal Nandi, business head and executive vice president, Godrej Appliances, which is part of Godrej & Boyce, said.
Eric Braganza, president, Consumer Electronics and Appliances Manufacturers (CEAMA), an apex body of the country’s top consumer durable makers, says there is a positive shift in buying patterns as prices of products have remained largely stable over the last few months.
“Last year, there was high volatility in commodity prices, this year, commodity prices have been stable. So, there are no price hikes expected leading into the festive season. That is one good sign. Second, the intention to purchase is high. This was visible during Onam this year, which acts as a lead-in into the main festive period of Dussehra-Diwali. In all, the festive season should be the strongest after a mixed performance seen in the last two quarters of FY24,” Braganza said.
While April-June saw a decline of 25% because the summer was a near washout in many parts of India, the consumer durables industry is expected to exit July-September with overall growth levels of about 7-8%, according to industry estimates.
The October-December period, on the other hand, will not only have the main festivals of Dusshera and Diwali, but will also have events such as the Cricket World Cup, which is likely to push consumers to upgrade their TV sets for a better viewing experience.
“Pent-up demand is high, which will show up during the festive period of Dussehra-Diwali. Consumers will look to take advantage of the offers, schemes and discounts to make durable purchases such as TVs for their homes and appliances such as washing machines for gifting purposes,” Avneet Singh Marwah, chief executive officer (CEO) of Super Plastronics, the brand licensee of Kodak, Thomson, Blaupunkt, and White-Westinghouse in India, said.
The regional festival calendar will see Ganesh Chaturthi happening on September 19, followed by Navratri and Durga Pooja in the second and third weeks of October. These festivals are likely to bolster overall consumer sentiment, Nilesh Gupta, director, Vijay Sales, a consumer electronics retailer operating in the west and north of India, said.
“The sentiment is good. People are coming out and buying. Overall growth levels this festive period versus last year should be at least 20%,” Gupta said.