Samsung India’s consumer electronics business grew more than 30% in October, with demand in smaller cities racing ahead of metros, said a top executive at the company
Samsung India’s consumer electronics business grew more than 30% in October, with demand in smaller cities racing ahead of metros, said a top executive at the company.
Business in smaller cities was driven by first-time buyers and those seeking to upgrade home electronics. The higher demand for household electronics fit into a trend reported by major appliances companies.
In October alone the company reported a 32% year-on-year jump in its consumer electronics business, excluding mobiles, —led by high-capacity washing machines, microwaves, refrigerators and large TV screens. Premium household electronics grew 50% in the same period.
“On the back of the new launches we had in August and September, we have seen strong performance in October. We have seen 32% growth overall in the festive period—across all categories. But more importantly, the premium product category growth has been outstanding—almost a 50% growth—most have come because consumers looked at upgrading their living spaces," said Raju Pullan, senior vice president, consumer electronics business, Samsung India.
Samsung is a key seller of mobile phones and home electronics in India with revenue from operations at ₹70,627.7 crore in 2018-19. A significant amount of the sales come from mobile phones.
Most electronics companies reported strong demand ahead of the festive season as the lockdown prompted households to upgrade goods for homes, and buy appliances to make chores more convenient. This is true of consumers seeking to upgrade to larger television screens and first-time buyers of dishwashers.
“This has been the best October ever for us, as consumers across the spectrum looked to upgrade their lives especially in the tier 2 and tier 3 cities. The demand is shifting towards premium electronics products," said Pullan.
The overall TV segment grew 32%, premium screens grew 50%, and 65-inch and above television sets grew 80%. Refrigerators grew 31%—with the 350-litre and above category seeing 40% growth, and premium side-by-side models clocking 75% growth, albeit on a small base. This, said Pullan, was driven by consumers storing more food at home. “We have moved largely from a fresh purchase economy to a storage economy—we tend to venture out less and purchase more and stock up."
Moreover, in line with most companies reporting a jump in demand for large screens as consumers upgraded to watching on-demand videos on bigger screen, TV sales grew, too. “We have seen strong growth in the entire home entertainment space because of the time spent at home."
Samsung competes with Panasonic, LG and Haier among other key electronics companies in India.
Both washing machines and microwaves performed well, said Pullan. High capacity washing machines grew by 50%, while front- load washing machines were sold out in October. “We are now stocked up for November and December," he added.
Growth was especially strong in smaller markets, which grew 36%, while premium products grew 68%. “Early indicators emerged from Durga Puja in the East where we grew 35% over last year. East is a market where entry level products typically do well—due to many first-time buyers; this time, however, we have seen premium grow by 62%, on a lower base."