“The industry is optimistic as companies on average have increased their marketing budgets by as much as 10 per cent this year. Consumer durable companies hope to increase their sales by almost 15-20 percent,” Consumer Electronics and Appliances Manufacturers Association (CEAMA) President Manish Sharma told IANS.
Festive sales usually comprise around one-third of the annual turnover and none of the companies can ignore this segment.
“In general, festive sales contribute 35-36 per cent of the annual sales for the industry. We spend five per cent of our turnover on marketing. Since the quantum of sales rises during the festival season in comparison to other periods of the year, the share of the marketing budget for this season is also significantly higher,” Godrej Appliances’ Business Head and Executive Vice President Kamal Nandi told IANS.
Sharma said e-commerce players too were trying hard to get maximum traction. “They have decided to cut their commissions from large and preferred sellers by 30-50 per cent,” he said.
“With a good monsoon and implementation of the Seventh Pay Commission’s recommendations, the second half of the year will witness higher growth compared to last year, which can result in 30 percent growth this year,” said Panasonic India’s Sales and Service Head Ajay Seth.
Primarily an air-conditioner maker, Carrier Midea India, which had launched a range of home appliances last festive season, also plans to unveil new products during this year’s festivals.
“Festive season is the best time to launch and showcase products because the demand reaches a peak. We are expecting festive sales to contribute 25-30 percent of the annual sales in our home appliances category,” Managing Director Krishan Sachdev told IANS.
Samsung India, a major player in the consumer electronic space, is also pinning its hope to mop up more sales by “developing new categories” with more innovation and “driving affordability”.
“Through this period there is a strong shift towards consumer electronics, home appliances and mobile devices. We have been achieving growth through product innovation and latest technology across categories. We are growing strong in 2016. We are expecting double-digit growth during the festive season,” Vice President (Consumer Electronics) Rajeev Bhutani told IANS.
Several companies in the Rs 50,000 crore consumer durables industry have been offering freebies, discounts, exchange offers and schemes.
Explaining innovative offering with consumer preference, Pradeep Bakshi, Voltas Ltd’s President and Chief Operating Officer (UPBG & MCED – Unitary Products Business Group & Mining & Construction Equipment Division), told IANS: “Consumers have developed a preference for energy-efficient inverter ACs, which are now the fastest-growing category in the industry. This festive season we have announced an exchange offer, wherein customers can bring in their old split AC, and get a new inverter AC at an attractive price along with free installation.”
The positive sentiment on the industry is reflected in the stock market. The S&P BSE Consumer Durables Index that measures the performance of these stocks, rose 3.25 per cent to 12,881.21 points as on October 3, 2016, from 12,475.53 points on the corresponding day of the last month. An upward trend was also noticed in the stocks during the last month.
On a year-on-year basis, the index rose 18.11 per cent on Monday.