Cabinet clearance to the Seventh Pay Commission would bring a needed respite for the consumer goods industry but experts said the growth rates might be muted. The penetration of branded goods in the country was low, industry executives said. Penetration of air conditioners (three per cent), washing machines (nine per cent) and televisions (60 per cent) remained lower than the global average of 60 per cent, 70 per cent and 89 per cent, respectively, they said.
The sector, comprising fast-moving consumer goods, consumer durable and electronic devices, has been struggling to grow during a large part of the previous two years as discretionary spending has remained low. One obstacle was affordability. But experts said the pay increase would take care of that issue.
An increase of more than 20 per cent in income of nearly 10.8 million government employees and pensioners would bring in additional cash flow to market as spending power of such households would go up. Experts and industry analysts said this would boost the consumer goods sector.
"Consumer durables such as air-conditioners, refrigerators, etc, were considered as luxuries. With the rise in disposable income and scaling of e-commerce, the consumer durable industry is expected to grow 15 per cent this financial year," said Ajay Seth, head of sales and service, Panasonic India.
Niladri Datta, Corporate Marketing Head, LG India, rise in income to have positive effects on rural and urban consumers markets.
FMCG sales had witnessed more stress as compared to those of durables in 2015. The durables and appliance sector in India grew 10 per cent during the year. Growth rate in sales of FMCG products went down to 3.2 per cent in the December quarter, after growing by seven per cent in the preceding two quarters.
The sector, comprising fast-moving consumer goods, consumer durable and electronic devices, has been struggling to grow during a large part of the previous two years as discretionary spending has remained low. One obstacle was affordability. But experts said the pay increase would take care of that issue.
An increase of more than 20 per cent in income of nearly 10.8 million government employees and pensioners would bring in additional cash flow to market as spending power of such households would go up. Experts and industry analysts said this would boost the consumer goods sector.
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"The pay commission will put extra money in the hands of a large section of the Indian consumer. This is a positive for the consumer durable industry as this will definitely spur demand for discretionary and aspirational products," said Sunil D'Souza, managing director of Whirlpool.
"Consumer durables such as air-conditioners, refrigerators, etc, were considered as luxuries. With the rise in disposable income and scaling of e-commerce, the consumer durable industry is expected to grow 15 per cent this financial year," said Ajay Seth, head of sales and service, Panasonic India.
Niladri Datta, Corporate Marketing Head, LG India, rise in income to have positive effects on rural and urban consumers markets.
FMCG sales had witnessed more stress as compared to those of durables in 2015. The durables and appliance sector in India grew 10 per cent during the year. Growth rate in sales of FMCG products went down to 3.2 per cent in the December quarter, after growing by seven per cent in the preceding two quarters.