Representative Image of appliances and consumer electronic.
Credit: iStock Photo
Buoyed by a good start with Onam in the southern markets, the appliances and consumer electronics industry expects around 18-20 per cent value-driven growth this festive season which is coinciding with the ICC Men's Cricket World Cup.
The cricket World Cup tournament is coinciding with the festival season in India for the first time after 1987, and the industry expects the country's most popular sport to act as a catalyst, leading to growth in sales of TV, especially with bigger screen sizes as well as audio products such as battery-powered party speakers, soundbars, wireless headphones and ear buds.
TV makers, including LG Electronic, Panasonic and Thomson, expect increased number of replacements of conventional and small-size TV screens with large-size smart TV panels above 55 inch screen size. Premium and ultra-premium ranges of QLED and OLED TVs are also expected to be in much demand during the World Cup from October 5 to November 19.
The industry expects overall sales growth of 18 to 20 per cent, and in continuation of the previous year a higher growth of over 30 per cent from premium products such as large screen TVs, higher capacity refrigerators and washing machines.
Like in earlier season, the industry is gearing up with offers and interest-free finance schemes to woo customers with new launches along with high-decibel 360 degree campaigns. However, there are also concerns about sales of value-based opening price point (OPP) mass segment products.
Godrej Appliances Business Head and Executive Vice President Kamal Nandi said again this festive season would be price-led, where the volume would be similar to last year but high-priced premium products would grow over 30 per cent.
"Mass segment will be under pressure, as we have been experiencing throughout this year right from Q1 because the inflationary trend is still continuing and as a result, there is pressure on the discretionary spends. Moreover, variation in monsoon, with some states not getting adequate ranis, could impact agricultural income. So, I think this both will play on the mass segment and therefore, we do not expect the mass segment really to do well," Nandi told PTI.
The appliance and consumer electronics industry is expected to cross Rs 70,000 crore sales this year and the festive season sales, which start from Onam in the south and cover Ganesh Chaturthi, Durga Puja and Deepawali, contribute around 25-27 per cent.
Companies also expect pent-up demand for air conditioners which faced challenged due to weather-related uncertainties this summer.
"There is demand even during the monsoon as there has been lesser rainfall. Therefore, temperatures were high. We see that trend very clearly in the southern, northern and parts of western and eastern markets also. In the north temperatures are high and with with little rainfall, humidity levels are also high. So AC demand will be there," he said.
Panasonic Life Solutions India also expects a double-digit value-led growth this festive season, primarily led by smart ACs and home appliances products including refrigerators and washing machines.
"Last year, we observed that value growth surpassed volume growth and anticipate the trend to continue this year as well with consumers seeking value-added features and lower total cost of ownership. Inverter ACs followed by 4K Android LEDs continue to be the growth drivers for us that grew in double digits," said Panasonic Marketing India Managing Director Fumiyasu Fujimori.
South Korean major LG India is encouraged by a 20 per cent growth in Onam sales and expects good growth both in volume and value terms during the festive season this year.
It has introduced Diwali offers ahead of the festive season to boost consumer sentiment and encourage early purchases, said LG India Senior VP -Head GTM Ashish Agrawal.
"This festive season is coinciding with the World cup. We will see good demand for large screen TVs, battery-backed party speakers and soundbars (audio category). There are many consumers who upgrade their homes or shift to new homes so demand for premium segment like large screen TV, large size refrigerators, washing machines, microwave ovens and AC will significantly increase," he said.
Similarly, Super Plastronics Pvt Ltd (SPPL), which has licences for international brands including Blaupunkt, Thomson, Kodak and White-Westinghouse for the Indian market, also expects the TV market to grow.
"There are few instances in the TV Industry where festival season and India's most popular sport cricket's main event World Cup will be together. We may witness the highest viewership ever, as a result, there can be significant growth in TV sales especially in higher screen sizes," said SPPL CEO Avneet Singh Marwah.
According to Consumer Electronics and Appliances Manufacturers Association (CEAMA), it is 'optimistic' about the uptick in consumer demand and expects "10 to 15 per cent sales growth this festive period."
"Unlike last year when there was high volatility in commodity prices, this year has witnessed stable commodity prices. Consequently, no price hikes are anticipated as we approach the festive season, which is indeed a positive sign," said CEAMA President Eric Braganza.
Emphasising on premiumisation of products, BSH Home Appliances India MD and CEO Saif Khan said consumer preferences are shifting towards high-quality, feature-rich and innovative appliances.
"The premium segment continues to be a significant growth driver for us. The external headwinds have had their fair share of impact on sales but Indian consumers have showcased resilience and the pent-up demand will work to our advantage this year," he said.
Haier India expects 30 per cent growth in sales and has launched a range of new products across categories. It expects the premium segment to perform even better than last year as more consumers are looking to upgrade their appliances.
"Our experience during Onam in the south has been encouraging... We have observed that premiumisation has been a consistent trend in the consumer electronics industry, and we anticipate premium segments will continue to lead the festive sales," said Haier India President Satish NS.