Consumer durable makers gear up for festive season demand amid inflation
2 min read . Updated: 25 Aug 2022, 01:05 AM IST
Premium- The upcoming festive season is expected to be better for business than the previous two years
NEW DELHI : Makers of consumer durables are banking on a better festive season to help lift sales of premium household appliances after drawing a blank for two years.
The upcoming festive season is expected to be better for business than the previous two years, said Kamal Nandi, business head and executive vice president, Godrej Appliances. Employers will be handing out bonuses that could help lift demand for household goods. However, given the general inflationary environment, middle-income households may postpone big-ticket purchases, Nandi said.
“This Diwali will be better than the last given that we will see many more organizations offering bonuses or increments. All these will lead to improved sentiment this festive season. Thus, we believe that the festive season should be good. There could be some postponement in purchases now, but I think the second half should do better," he said.
The company is expected to ramp up marketing spends by nearly 40% compared to a year ago, albeit on a low base. The days leading up to 15 August reported a spike in sales, Nandi said. This demand has since moderated.
The local arm of Korean white goods maker LG Electronics said its factories will be working at full capacity to address festive demand. “So far we have witnessed good demand and crossed the pre-covid level. There is good demand for bigger capacity appliances," said Deepak Bansal, vice-president, home appliances, LG India.
Companies are also shoring up their marketing budgets in anticipation of improved demand. “We will plan an extensive campaign ahead of the festive season. Our focus will be to offer an exciting experience to consumers. We plan to spend more than pre-covid levels," he said.
For Usha International, which sells small home appliances, parts of northern India reported growth in demand starting early August.
“If we compare it to last year, the growth has been similar. What we need to be cognizant of is that last year during this period there was a lot of pent up demand as the markets were opening up after the lockdowns imposed during the second wave of covid-19 and we had seen a huge sell out growth," pointed out Saurabh Baishakia, president, appliances, Usha International.
Companies have also been facing unusually high inflationary headwinds that pose a challenge for manufacturers and households. “Inflation has hit the market but we are witnessing a gradual revival in demand across key categories and markets," said Neeraj Bahl, managing director and chief executive officer, India and SAARC, BSH Home Appliances.
