Reeling from the significant drop in spending amid the pandemic, consumer-focussed brands are betting on the festive season to help recover losses of the past few months. Seeing steady growth post the lockdown, the brands expect an uptick of up to 30% in business, led by home and kitchen appliances on the back of work-from-home trends and strong demand from semi-urban and rural markets.
“Driven by a gradual uptick in demand for value-based products, we are expecting steady growth. We are hopeful the festive season will help recover losses incurred in the past few months,” Suguru Takamatsu, divisional head, CSD, CE, Panasonic India, said.
Festive sales, in general, account for 35-40% of annual business for most consumer durable firms.
Panasonic saw 10% growth in July, as opposed to a contraction in May, owing to pent-up demand, first-time buyers and rising rural contribution due to a favourable monsoon.
He added that growth in tier-2 markets was 13% in June and 19% in July, driven by accelerated demand for microwaves, semi-automatic washing machines, LED TVs and refrigerators.
K.G. Singh, vice-president, Marketing, Whirlpool India, said with the unlocking, “initially, there was an unleashing of pent-up demand and later, with work-from-home, consumers bought appliances that add to their comfort level and ease their pain from household chores. We have seen strong, double-digit growth across cities... with many upgrading to larger screens (55 inch and above)... they are buying bigger 5-in-1 smart, convertible refrigerators above 300 litres to stock up more and venture out less, and fully-automatic washing machines…”
LG Electronics India is betting on health and hygiene being top priority for buyers. It is offering complimentary insurance benefits with home appliances for select diseases, such as COVID-19, malaria and dengue.
“Last year, we saw 30% growth in the festive season and hope to achieve the same this year,” Vijay Babu, VP, Home Appliances, LG Electronics India, said.
But, local lockdowns, shorter store operating hours and smaller inventory cycles remain a challenge.
Dinesh Chhabra, CEO, Usha International said dealers were now cautious about building inventories given the uncertainty and preferred to look at a supplying daily/selling daily model. “The months up to December are a crucial period,” he added.
Some customers have started to visit malls as they get more confident about venturing out, said Pushpa Bector, ED, DLF Retail.
Footfalls at DLF Promenade went up to 18,000 in Independence Day weekend. “We are hopeful demand will normalise by Diwali,” she said.