So far resilient to the slowdown in the economy, the consumer durables industry is expecting better sales this summer compared with the summer of 2008, as it gets ready to hit the markets with new launches and larger spends. What has changed, albeit slightly, is the focus on providing consumers with value propositions and tapping the rural markets.
Even though most industries are cutting back on capital expenditure as consumer confidence hits new lows, the consumer durables industry has got lucky on multiple fronts — the Sixth Pay Commission wage hikes and arrears, which came into effect from January 2006, gave government employees larger disposable incomes. Hence, discretionary purchase of consumer durables has increased.
Rhe rural growth story, which has remained unaffected by the global meltdown on account of a good monsoon last year coupled with the National Rural Employment Guarantee Scheme, has helped the consumer durables industry. Reasons for good growth expectations this summer include more consumers purchasing this year as they had put their purchases on hold last year on account of a contracted summer, say experts.
Consumer durable companies like Samsung, Videocon, Godrej Appliances, LG, all have aggressive plans. Brand consultant Harish Bijoor, who is CEO at a company by the same name, says: “The focus will be on the top-end and the value segment as companies will promote consumer durables that are efficient. There will be a thrust on value offers like buy a refrigerator and get a microwave free.”
