Signs of a reviving economy are evident this festival season at shopping malls and retail chains across the city. Demand is high for consumer durables, especially electronics.
Signs of a reviving economy are evident this festival season at shopping malls and retail chains across the city. Demand is high for consumer durables, especially electronics, with people going for products with style and better features. Anticipating big sales, retailers are offering attractive discounts and bundled offers.
“There have been two distinct phases — last year this time, we were going in the reverse direction and there was no growth. Now we have come out if it. In the last three to four months, we have been seeing extremely robust growth across categories,” says Shantanu Das Gupta, vice president, corporate affairs and strategy, Asia South, Whirlpool India Ltd.
The index of industrial production (IIP) has shown that the consumer durables segment grew by 22.3% as against 3.9% on a year-on-year basis — though the consumer non-durables category fell to nearly half (3.7%) of what it was last year (7.3%).
“If you look back, the number has been progressively better. We have been noticing that consumer sentiment is becoming more and more positive. The last few months have been good not only for us, but also for the entire consumer durables segment and the electronics industry,” says Das Gupta.
High-end refrigerators, LCD TVs, laptops, split air-conditioners, smart phones and home theatres are in demand as consumers are upgrading products, but there are few takers for CRTs, desktops and window ACs, according to Manoj Kumar, chief executive officer, E-Zone. “Business is very good and consumer sentiment is back to normal,” Kumar says.
Nilesh Gupta, managing partner, Vijay Sales, agrees. “People are willing to spend on durables and electronics. We do not see resistance in spending,” he said. Das Gupta says refrigerators and washing machines are doing very well, and demand for microwave ovens is picking up.
According to Gupta, one category that has largely stagnated is music systems. “With consumers opting for home theatres or for smaller music systems like mp3 players and iPods, sales of traditional music systems have stagnated,” he said. Multimedia mobile phones have contributed to the lack of demand for music systems, he said.
Retailers believe that CRTs will phase out in the coming years, while digital products such as laptops and flat-panel televisions will fare exceptionally well. Consumer electronics giants Samsung India and TCL India Holdings last year launched LED TVs in India, and both are citing positive sales expectations.
R Zutshi, deputy managing director, Samsung India, had told DNA earlier that given the more-than-expected success of high range and premium LED TVs, the company is expecting LEDs to corner about 10% of the flat-panel TV market.
Ajit Joshi, chief executive officer of Infiniti Retail, which runs the Croma chain, said consumers are upgrading from LCD to LED TVs and from regular mobile phones to smart and business phones. While the mobile phone category has always done well, retailers say sales of business phones have seen an unprecedented surge.
“People have started browsing the net on mobile phones, and they are going for business phones,” said Gupta of Vijay Sales.
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