Dhanteras, which was traditionally known to push the jewellery market, has also evolved as one of the catalysts of the white goods market. According to Hindu mythology, Goddess Lakshmi, along with Lord Kubera, the God of Wealth, is worshipped on this day and buying of metal items is considered auspicious.
Slow consumption might affect
In the 2018 fiscal, the sale of consumer electronics and white goods had recovered by 12 to 15% during the Diwali season as compared to the 2017 fiscal. Many market insiders saw this spurt in sale of consumer electronics as a sign of the return of flexible spending. Sales of appliances like refrigerators, air conditioners and washing machines achieved a double digit growth in 2018 after the government on July 21, cut the GST rates on electronic products to 18% from 28%.
However, the market has fallen since then. The current fiscal year is characterised by a very low consumption rate. According to market analysts, the white goods market is likely to weaken under the present economic situation as it is largely driven by disposable income. White goods manufacturers were forced to increase prices due to escalation of fuel costs. Additionally, the depreciation of the rupee also had a detrimental role.
White good manufacturers and retailers are apprehensive regarding their sales during this festive season and are devising various strategies. Most white good manufacturing companies are coming out with attractive offers. Many others are bringing out new products to push sales. Pradeep Bakshi, MD and CEO, Voltas, told BE, “We expect a build up of sale during this festive season especially for home appliances. This year, the company has launched India’s first Adjustable Inverter AC range, which comes with the unique value proposition of Flexible Air Conditioning, besides a unique range of Wi-Fi enabled ACs which can be voice controlled through Alexa.”
Prashant Agarwal, Director, Capital Electronics, a leading white goods retailer in Kolkata, informed BE, “We expect the festive season to push sales. The market is showing demands for technologically advanced branded goods like inverter ACs and smart TVs. Artificial Intelligence (AI) enabled items like Alexa are also gaining good traction among young buyers and are expected to perform better in near future.”
Generally, the festive period witnesses a rise in sale of heating appliances as the festive season precedes winter in India. Room heaters are traditionally one of the most sold items in this period. However, apart from the sale of room heaters, owing to lucrative offers on air conditioners and coolers, customers have also taken to buying of these items. In south India, the state of Kerala was ravaged by floods in 2018. The white good market in the state is likely to bounce back, this time round, riding on better market dynamics in the state.
The Indian domestic appliances market in India in the last 10 years grew by nearly 9% (CAGR) that surpassed the 3% global growth rate. E-commerce giants like Amazon, Snapdeal and Flipkart have become important stake-holders. Last year, their order volume from various white goods brands, increased by 50-80% during the festive season.
Innovative easy monthly installment (EMI) schemes have helped the white goods market. Financing contributed to over 80% of purchases in the last festive season as compared to 60% in 2017 over the same period. EMI transactions also grew two times during last year with 70% customers using EMI from tier 2 cities while credit card adoption grew by 19 times.
The fortune of the white goods market in this fiscal largely rests on its performance during the festive season. A cautious market, dipping disposable incomes and weak market dynamics may hamper it growth projection. Attractive offers and innovative marketing strategies may bring in some relief.