Summer has arrived early this year, bringing a bounty to the manufacturers of cooling appliances after two washout years due to the pandemic. The segment, which includes air conditioners, refrigerators, chest freezers and air coolers, saw a decline of 35-40% in 2020. While sales marginally increased the following year, the industry was hit by the second and third waves of the pandemic, with the more severe second wave coinciding with the summer business season that year. This year, sales figures of air conditioners and refrigerators hit the roof led by pent-up demand and a hotter-than-usual summer across the country. India witnessed the hottest March in its recorded history of 122 years since 1901. The India Meteorological Department has predicted that heat wave conditions will continue over the next five days in central and northern India. Kamal Nandi, business head and executive vice-president at Godrej Appliances, says a shift to hybrid working and the expectation that schools and colleges could take up online classes occasionally is driving up demand. Consumers setting up home offices will require air conditioners to beat the heat. Despite a host of factors helping sales, manufacturers are experiencing supply chain disruptions because of escalating lockdowns in China. With supply under threat, companies in India could struggle to meet the resurgent demand beyond a point. 23 Chinese cities including Shanghai are under total or partial lockdown, affecting an estimated 193 million people in regions accounting for 22% of its GDP, according to Nomura. Consumer durable companies are also battling rising commodity costs.
They are gearing up for a second price hike of this year in April after effecting three prices increases in 2021. Any disruption in component supply, on top of this, is the last thing the industry would want in their first full summer of business after two years.
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