Durables firms see sales spike3 min read . Updated: 23 Sep 2020, 07:40 AM IST
- The sales were led by pent-up demand due to lockdowns
- Brands will be aggressive with festive offers
Consumer durable firms have witnessed a spike in online sales of a range of products during the ongoing pandemic as buyers avoid venturing out. At the Mint CMO Dialogues webinar held on Tuesday, senior executive said that they have witnessed a jump in online sales ranging from 12%-50% in the last six months for a wide range of products including air conditioners, washing machines, food processors, microwave, refrigerators and television sets.
This is in line with the industry forecast by consulting firm Boston Consulting Group in collaboration with search giant Google India which stated that by 2023, $10.4 billion or 28% of sales for durables will be online.
The sales are led by strong replacement and pent up demand due to restricted supply owing to nationwide as well as state lockdowns.
At retailer Croma, online sales have surged significantly in the last six months, even as its stores have seen people walk in to buy goods they need. While footfalls at stores are still low, conversions are high. Ritesh Ghosal, chief marketing officer, Croma, Infiniti Retail Limited said that though for the category “touch and feel" remains important, the pandemic has accelerated consumer adoption to digital.
“We have seen our online sales (contribution) go up from being less than 2-2.5 % of our total sales, to today touch 12%—so that is the extent of shift that has happened. That said, the moment the lockdown has been relaxed people are back in stores. It is not that the time for brick and mortar is over," he said.
Shirish Agarwal, head of marketing and brand, Panasonic India said that overall industry will see a spike in terms of sales and we are highly optimistic. “Online is driving incremental sales as pandemic has made people well versed with online platforms. As compared to last year, the online contribution has gone up by 40-50%. We will see brands will be aggressive with festive offers, you will see schemes and offers being rolled out by brands. How well you package and you stand out of the clutter will be key. I think we will overachieve last year’s numbers," Agarwal said.
Last month, local arm of Korean electronics company LG opened its own online store for shoppers in select cities India as brands look to build direct sales links to shoppers. "It is going to be high growth in the online sales channel as well in this festive season. This festive season we are looking at a 40-50% increase over the previous year in terms of the online sales," Tahir Hakeem, head, brand and retail marketing, LG Electronics India said.
Overall, LG is expecting business to be up 30% this festive season compared to a year ago period, said Hakeem.
From a consumer and marketing perspective, this will be digital festival said Amit Tiwari, Vice President, Marketing, Havells India who admitted that online sales have gone up in various markets. “There is an online demand coming from towns where penetration of certain products has been low owing to better digital infrastructure. Therefore, apart from urban and semi-urban, online demand is also coming from rural markets," he added.
Noting that sales is a function of how well searched a brand is online, Deba Ghoshal, Vice President, Marketing and Key Accounts, Voltas said that they invest heavily on search. “We have the largest market share in online also in certain product categories. All online marketplace will collaborate with most searched brands online. Online is definitely important as our air conditioning and air cooler category has seen a lot of online traction. Our B2B commercial freezer and coolers category have been seen a similar response on digital. This festive season would be a combination of both online and offline sales for us," he added.
However, panellist cautioned that consumers will only buy need-based goods while postponing discretionary purchases. “Cautious spending is definitely what we are observing, it isn’t about the way it used to be that people are waiting for big sales and we were ready, the question is about what they (shoppers) can afford and what is authentic for them," said Havell’s Tiwari.