Promise of bright Diwali for white goods makers

With pre-Diwali sales having seen double-digit growth over last year, companies are positive the five-day Diwali period beginning today will end on a positive note

For once, consumers seem to be shedding their inhibitions and making a beeline for their neighbourhood electronics stores. If pre-Diwali sales are any indication, then most major manufacturers — from LG to Samsung, Videocon, Onida and Haier — say sales in the two weeks running up to Diwali have been good, with 20-30 per cent growth over the last year. White goods manufacturers expect the Diwali period, from Friday (Dhanteras) to Tuesday (Bhaubeej), to see sales growth accelerate as consumers are lured with meaty discounts, offers and savvy products.

Deepak Jasodia, business group head (home electronics) at LG India, says sales growth so far has been led by categories such as flat panel TV sets and mobile phones. Flat panel televisions alone have seen a year-on-year growth of 30-40 per cent. “Traditionally, this period is considered good for the sale of home electronics. This year, most were expecting the pace of growth to be lower given the slowdown in discretionary spends. But sales seem to have bucked that trend so far. We remain optimistic about Diwali as well as post Diwali,” he adds.

Atul Jain, senior vice-president (consumer electronics) at Samsung India, attributes the spurt in sales seen in flat panels and mobiles to the migration of consumers to bigger and better products as well as affordability led by financing schemes. C M Singh, chief operating officer, Videocon, says in smaller towns and cities, consumers are directly making the switch to flat panel TVs, especially LEDs.

Retailers, both small and big, admit the expansion seen in consumer electronics has been largely led by mid- and premium-priced products. In mobile phones, for instance, it is Samsung and Apple that lead the pack, says Ajit Joshi, chief executive, Infiniti Retail, which runs consumer electronics chain Croma. "Thanks to new launches by Samsung and Apple, we are seeing significant growth in mobilephone sales,” says Joshi. He, however, does not elaborate the specific growth in sales in mobile phones this year over the last year.

However, Essar group-owned The Mobile Store says it is seeing a 25-30 per cent growth in the past week in mobile phones. “There has been pent-up demand and a slew of new launches, which have helped sales," said Himanshu Chakrawarti, CEO, The Mobile Store.

Durables sales pick up, too

Manufacturers and retailers admit sales of home appliances  have also picked up in the run-up to Diwali as consumers grab these products owing to the marriage season that kicks off right after Diwali. “This year, November has 12-15 days of wedding season as opposed to three days last year. This is resulting in good traction for home appliances such as washing machine and refrigerator, since this is something that would be gifted to newly-weds," says Rajeev Jain, business group head (home appliances) at LG India.

According to Jain, sales growth for LG in categories such as washing machine is 25-26 per cent this year in the run-up to Diwali over the last year. “It has certainly come as a surprise to us,” he says.

Eric Braganza, president, Haier Appliances India, says sales growth for his company in categories such as washing machine and refrigerator is likely to be in double-digits in November as both a five-day Diwali and a fairly long marriage season in November induce consumers to purchase these products. Y V Verma, CEO, Mirc Electronics, the maker of the Onida brand of durable and electronic products, also says he is expecting a sales growth of at least 15 per cent this Diwali across categories.