Festive sales usually comprise around 28 – 30% of the annual sales of Godrej Appliances. Diwali being in November, the first 20 days has shown phenomenal growth of 30 – 40% as compared to last year. This is because the previous year’s festive period was over by October.
If we consider the 15 days leading up to Diwali, on a secondary level there was slight degrowth over last year.
However, at an overall level, comparing the sales for the festive months, which was October last year with October and November this year, we have seen a growth of 8 – 10%. This growth was fueled by premium appliances like frost-free refrigerators, fully automatic washing machines and microwave ovens. This indicates that consumers are looking for appliance upgrades – delivering comfort and convenience.
The market rebounded much faster than expected. However, contrary to expectations, upcountry markets have not done well during festive. The city markets have shown better traction.
There was a spike in online sales during Diwali. With the continuing fear of pandemic, consumers are opting for contactless digital means throughout the purchase journey. We saw a massive surge in online sales up to 70% during this period across categories, led by frost-free refrigerators at 90% growth over last year and microwave ovens & washing machines not far behind.
Appliances have emerged as one of the most essential and valued products at home and we hope this momentum continues.
Generally, the rural consumption picks up in Q4 of the financial year whenever the agriculture sector performs well. This year the paddy procurement for Kharif 2020-21 shows an increase of 22.89 % over last year. This, we hope, will help in spurring demand in the rural belt. The wedding season is also expected to drive some appliance consumption given the tradition of gifting appliances.
The trend of home appliances substituting some domestic help will continue to some extent especially in densely populated cities, till Covid-19 vaccines are made available and administered across. And with several firms reversing pay-cuts in urban areas, the disposable income with consumers will be higher than the first half of the financial year and we expect this to propel the demand for appliances.
Predominantly, due to the pandemic and the subsequent lockdown, AC sale was a washout last summer and consumers had postponed the purchase. We expect the pent-up demand for ACs to reflect in the upcoming months, that too before the AC peak season as consumers will be keen on making the purchase earlier to avoid any unexpected lockdown situation.
One clear challenge ahead however is the hike in commodity prices mainly due to a shortage of raw materials. As a result, brands are most likely to increase prices to the extent of 3-4 % in December, which may hamper the demand to a certain extent.
By Spokesperson : Kamal Nandi, Business Head and Executive Vice President – Godrej Appliances.
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