Consumer durables companies are lining up new product launches and promotional offers to cash in on an expected increase in consumer spends. After a 20-40 per cent growth rate during the festival period this year, consumer durables manufacturers are looking at similar growth during the winter months (November-January).
The expectation is that there will be a surge in sales during Christmas and New Year as well as the wedding season, which traditionally leads to an increase in high-end product sales for gifting purposes.
Whirlpool of India was increasing prices of its refrigerators and washing machines by 2 per cent, Shantanu Dasgupta, vice-president (corporate affairs and strategy), said. “Commodity prices, like that of oil, plastics, steel and copper, have gone up. So, we decided to increase prices, after nearly a year."
Whirlpool had increased prices by 4-5 per cent in phases between July and September 2008. But it reduced prices by over 5 per cent, again in phases, in 2009. Now, the company is again increasing prices by 2 per cent and believes that a price hike will not dent overall sales.
Although none of the other consumer durables companies are contemplating any immediate price correction, they are rolling out new products and promotional offers to woo consumers in the winter season.
Godrej & Boyce, for instance, will include washing machines and air-conditioners in its next round of launches. The changes brought about with each launch will build on changing preferences for aesthetics and technology. The company witnessed a growth rate of 20-25 per cent in refrigerator and air-conditioning sales in the first quarter due to an extended summer. In terms of the entire year, the company is targeting a 20 per cent growth rate in turnover to Rs 2,000 crore.
It expects to earn Rs 700 crore between September and December this year, an increase of 30 per cent in sales over the corresponding period of the previous year. Kamal Nandi, VP (marketing), said: “The winter season between November and January makes up around 20 per cent of our sales. This period sees a surge in sales of high-end products, like microwaves, especially for gifting purposes."
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Samsung Electronics, on the other hand, is looking at sales in the ratio of 45:55 between first half and second half of the current year. "In October this year, we have recorded a 40 per cent growth rate in sales over the corresponding period last year," said a spokesperson of Samsung Electronics.
LG Electronics, on its part, is targeting a sales of Rs 2,800 crore in the three festive months, beginning September — a sales growth rate of 35 per cent over the corresponding period last year.
Amitabh Tiwari, LG's business head (consumer electronics), said: "Last year, consumer sentiment was bad. But it has improved substantially now. So, we are spending Rs 110 crore this festive season for advertising and promotions during the festive months, up from Rs 68 crore last year. We are looking at launching a new range of products and investing in more television commercials."
LG is also expecting to close this year with a turnover of Rs 11,500 crore, up from the Rs 10,000 crore clocked last year.