The Consumer Durables industry is expecting a strong festive season with positive early indicators giving manufacturers and retailers of home appliances. The industry is expecting a growth of anywhere between 10-20 percent growth in the run up to Diwali. The festive season traditionally accounts for 30 percent of sales for the industry. This year, the sales are expected to be led by premium products, a trend that has been visible for the past few quarters.

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The consumer durable industry faced a rather lukewarm summer in 2023, with sales plummeting by 25-30% despite soaring temperatures and a delayed monsoon.

The summer months of April and May, when air-conditioners and cooling appliances are traditionally in high demand, were uncharacteristically slow this year. While heatwaves swept across the nation, the consumer durable sector witnessed a drop in sales.

However, since August, the industry has been seeing health footfalls starting from Independence Day, followed by festivals like Onam.

“One is 15th August was super bumper this year. And I'm not talking terms of sales alone. This time we saw the maximum number of footfalls coming in and converting into sales. Secondly, even the Shrad period has become nearly a week and we have not seen a decline which normally we see during the period. So, I feel the consumer is in the mood of buying and hence, we expect a good season this year, something which we have not seen, I think the last few years,” Nilesh Gupta, Director of Vijay Sales, said.

Summer too, he says, was a washout not because consumer sentiment was low, but because weather didn’t support. “We had rains throughout the summer, intermittent rains coming all across the country, and I think that was a reason. Now we are seeing a lot of heat happening the summer actually has come back and AC sale is growing over the last year in the same period,” he added.

An added boost this time is the World Cup also coinciding with the festive season, which has been boosting sales of televisions, especially large-screen and high-end TVs.

Mohandeep Singh, Senior VP - Visual Display Business at Samsung India, highlighted the surge in television sales, which is not typical for this period. "...given the World Cup fervour, I think the consumers are buying into televisions right now. So we've had a fantastic response on the online sales that we are seeing right now. But at the same time, we are also seeing a great response in offline."

"In India, the festive season spanning from Onam to Diwali is a prime time for new product purchases. This year, we have observed a substantial surge in the demand for smart TVs. TV manufacturers in India have proactively increased their stock levels, reflecting the heightened consumer interest. It appears that Indian consumers now have greater affordability, leading to a preference for larger-screen TVs for an enhanced content viewing experience. Furthermore, the availability of diverse financing options has significantly bolstered consumer demand,” Arjun Bajaj, Director - Videotex added.

The mass segment, however, continues to be damp. This, some experts say could pick up later towards the wedding season. Eric Braganza, President of the Consumer Electronics and Appliances Manufacturers (CEAMA), explained the shifting trends, stating, "During the festive season, by and large, mid and high and premium products sell. And we hope that once we move into the beginning of the next year season, the mass market will pick up again. But in our industry over the last few months, we've seen a bit of a slowdown in the mass segment."

However, Nilesh Gupta adds that the shift away from the mass segment also has a lot to do with the availability of EMIs and consumer financing schemes that is helping consumers upgrade. “I think primarily the reason is because of the EMI offers which are they're currently across the categories. In the last 3-4 years we have reached 70 to 75% of sales happening through EMI, but what is happening is now the difference is since the EMI tenor has even increased by the brands and the retailers put together so what we are seeing is a growth in high end products, high value products going in EMIs and that's a major change which we are seeing,” he added.

The positive trend in terms of footfalls, is not limited to consumer durables, but also the retail sector on the apparel side. Raymond’s Group Chief Financial Officer Amit Agarwal told CNBC-TV18 that there has been a sharp increase in the store footfalls indicating a strong festive season, much better than last year.

"As soon as Navratri started, the footfalls in the store have increased dramatically. If I compare Sunday sales of last week to this Sunday's sales, across the country it has been moving from 25% up to 45% up on the same day basis," he told CNBC-TV18.

Lalit Agarwal, Founder and Managing Director at V-Mart Retail, also expressed optimism.

"We are seeing a good response in Eastern India and we are excited about the festival. We believe a lot of things getting assembled into quarter three, including festivals, winters, and weddings. Quarter three is going to be a very good quarter," he said.

Earlier today, Saurabh Mukherjea, Founder of Marcellus Investment Managers told CNBC-TV18 that he believes the era of 'mass consumption' is behind us and we are now shifting to 'class consumption'.

(Edited by : Shweta Mungre)

First Published:Oct 18, 2023 5:14 PM IST