Premium products lead Dhanteras Diwali shopping consumer durables see 20-25 pc growth

New Delhi, Nov 6 (PTI) Sales of appliances and consumer electronics witnessed a strong growth during the ongoing festive season, which peaks on Dhanteras on Friday, with leading players reporting double-digit increases in both volume and value terms, driven by robust demand for air conditioners, refrigerators, washing machines, and premium products.

     Despite a price hike, the industry has seen a strong pick-up in consumer spending during the Navratri-Diwali period, with sales gathering further momentum around Dhanteras, traditionally one of the biggest shopping days for consumer durables.

     Haier Appliances India President N S Satish said the company's sales have grown 10-12 per cent in volume terms, while value growth stood around 25-30 per cent.

     "As of now, festive sales this year have been good, and sales during the Dhanteras week have also been encouraging," Satish told PTI.

     However, he also added that mid- and high-end premium products are witnessing strong growth, while the mass market and affordable segments are growing at a slower pace.

     Products such as side-by-side refrigerators, which typically have capacities ranging from 520 litres to over 800 litres, front-load washing machines and large-screen televisions are performing particularly well, Satish said.

     However, entry-level products as 32-inch and 43-inch screen size LED TV are not witnessing similar traction.

     Kamal Nandi, Business Head and Executive Vice President, Appliances Business, Godrej Enterprises Group, said the company's sales have grown more than 50 per cent in value terms during the period from the first day of Navratri till November 5, compared with the corresponding period last year.

     "The industry has also done well. About 20-25 per cent growth in the industry has happened. These are both by value," he said, adding that the company's growth has been broad-based across product categories and markets.

     Air conditioners are leading the growth, followed by refrigerators and washing machines, Nandi said.

     Unlike some other segments, premium as well as mass-market products are witnessing strong demand, with Godrej recording more than 50 per cent growth in both categories.

     The growth has been witnessed across the country rather than being restricted to specific pockets, although air conditioner sales have been relatively stronger in western and southern markets due to higher temperatures in October, he added.

     Blue Star Managing Director B Thiagarajan also said the company has witnessed strong revenue growth during the festive period. It has recorded more than 40 per cent growth during the current week, reflecting strong festive buying.

     "Revenue growth is exceedingly good. It is more than 40 per cent. That is not a problem. Margin only is the problem," he said.

     The company's revenue growth has exceeded expectations in the September quarter as well as in October, with the momentum continuing into November, he added.

     However, margins remain under pressure, prompting companies across the industry to announce price increases to pass on higher costs.

     Thiagarajan said the consumer economy is performing better than expected and the West Asia crisis has not had any visible impact on demand so far.

     "On the demand side, we are not seeing West Asia crisis at all impacting anything. So that is the good news," he said.

     He, however, said the sustainability of demand after Diwali would be important to watch, particularly after companies have implemented price increases. A subsequent buying window around the New Year, followed by the summer season, would determine the industry's growth trajectory, he added.

     Industry executives said the shift towards premium and feature-rich products, along with demand for large-capacity appliances, has supported value growth, while the festive season has provided an additional boost to overall consumption.

     The industry will now be watching whether the strong buying momentum sustains after the festive season, particularly as higher product prices begin to reflect in consumer purchases.

     Generally, the festive period covering Onam through Dussehra and Diwali typically contributes 30-40 per cent of annual sales of appliances manufacturer, according to sector reports.

(This story has not been edited by THE WEEK and is auto-generated from PTI)