India’s festive season proved to be a boon for consumer durables companies as sales went up for segments like washing machines and refrigerators.
As soon as the festival season was over, consumer durables companies increased prices in certain categories such as refrigerators and washing machines as they were on offer during the festival time. “On a monthly basis, selective price increases were seen across categories, driven by a reversal of promotional offers after the end of the festive season,” Emkay Global said in a note on Thursday. However, the prices are still largely lesser than last year’s rates, when compared on a yearly basis, the report added.
India’s festive season proved to be a boon for consumer durables companies as sales went up for segments like washing machines and refrigerators. “The demand for washing machines was the strongest during the festive season, followed by demand for refrigerators and RACs,” Emkay Global said. Behind the growth of the premium product segment is attractive offers such as cashbacks and finance schemes, the report added. However, entry-level products were impacted by rural stress and the sales of these dipped. The rural India has been proving to be a distress for both FMCG and FMCD players as demand has been largely sluggish from these areas for close to 10 months now.
New players, tough game
Players such as LG and Samsung have launched new SKUs to keep up with the competition as new competitors are emerging in the country. “Competitive intensity in the durables space is expected to remain high with the entry of new players and category expansion by existing players,” Emkay Global said. Samsung, for example, has increased focus on the RAC category.
Meanwhile, the consumer confidence has picked up after months of pessimism meaning that people are more willing to loosen up the purse strings. “Consumer Confidence has shown recovery of 2.9 percentage points in November 2019, with marketers unleashing a bonanza for consumers, by low interest, almost 100% financing, sops and deals, lifting the mood and infusing positivity,” Ipsos and Thomson Reuters said in a joint survey recently.