The Indian consumer durables industry has firmly put the slowdown behind it after buoyant demand from first-time buyers in semi-urban markets and affluent customers in the premium category lifted companies to a double-digit volume growth in January-November 2009.
The consumer electronics industry, in particular, benefited from robust demand for high-value goods such as LCD televisions, split air-conditioners, and frost-free refrigerators, which helped it overcome the crushing second half of 2008 and sluggish first quarter of 2009, say data from market research agency ORG-GFK.
The LCD television category grew 93% units during January-November, washing machine sales grew 14%, and refrigerators surged 16.4% from a year ago, according to the data.
Though around 70% sales continued to be driven by large cities, consumption soared in the rural and semi-urban markets as public sector employees there were hardly affected by the slowdown.
Companies were also helped by an overhaul of strategies. Distribution strategies were tweaked and investments were ploughed back into brand-building and promotions. Companies such as LG, Videocon, Samsung, and Godrej announced scores of new products and offered hefty discounts during festive periods to woo consumers. These companies are also investing in tailoring products and prices as per the needs of rural consumers to spur demand in these markets.
For Samsung, growth was fuelled by launches, improvements in the economy, and more income for consumers. “We achieved the 25% growth target during the year across home appliances category,” said Samsung India deputy managing director R Zutshi.
The government’s stimulus packages rolled out early last year and wage revision also boosted consumer demand as prices softened.
“The government’s support though stimulus measures, revision in salaries of employees coupled with fresh recruitment across sectors is giving a further fillip to demand,” said LG India sales head Amitabh Tiwari. The company claims to have posted a 30% growth in sales volumes in 2009.
The ORG-GFK data showed that within refrigerators, the mass-product direct cool category leapt 21% while the premium frost-free fridge category grew 7.4%. Sales in fully-automatic washing machines rose 21% units and split air-conditioners grew 13.4%.
Still, the furious pace of growth did not cut across all segments. Television segment on the whole grew only 5% while microwaves grew at the same rate. Overall growth in air-conditioners was just 3%, crippled by the negative growth in window air-conditioner sales.
An executive of a Delhi-based durable company cited limited coverage and change in the panel of dealers by ORG-GFK as the key reasons for the tepid growth in some categories.
(Source: The Economic Times)
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