India’s largest consumer electronics and smartphone brands Samsung, Xiaomi, LG, Bosch, Siemens, Realme and Vivo reported their best festive season sale. Marketers attributed this to a significant improvement in consumer sentiment and people purchasing the latest gadgets to improve their lives or get a boost with few other avenues to spend on.
Five industry executives said these companies increased sales by up to 30% during the entire festive season — covering Onam, Navratri, Durga Puja, Dussehra, Karva Chauth, Dhanteras, Diwali and Bhai Dooj —over the same period last year. That’s come from a surge in ecommerce led by marketplaces Amazon and Walmart-owned Flipkart as well as footfalls in retail stores improving to pre-Covid levels, they said.
Diwali Business Grows by40%
As a result, several companies are revising their outlook for the year after recovering a significant portion of business lost in the lockdown during the festive period.
Even apparel makers such as Reliance Trends and Levi’s saw festive sales almost touching last year’s levels, largely aided by ecommerce and robust demand in smaller towns, which reversed the earlier trend when consumers struggled with shrinking disposable income and held back on spending beyond essentials.
Overall festive business is up by 32% while Diwali business alone grew by 40%, compensating for almost three-fourths of revenue losses incurred during the lockdown quarter, said Vijay Babu, vice president, LG India, Indies largest appliance maker. Samsung, Indies largest electronics company, grew sales by over 30% in the festive period. India imposed a nationwide lockdown on March 25 and began lifting it in phases starting May.
“Pent-up demand has continued well into the festive season, leading to record sales proving wrong all apprehensions,” Babu said. “Consumers preferred premium products across categories, whereby growth rates of premium products grew at double the pace of entry-level (items).”
Neeraj Bahl, CEO of BSH Home Appliances India, which makes Bosch and Siemens appliances, said the company saw festive sales rise 50%, recouping the 200 crore sales lost during lockdown by November, and lifting profit.
Xiaomi India managing director Manu Kumar Jain told partners and employees in a note on Sunday that “even during these tough times,” the company overcame “extreme challenges to have one of the best ever festive sale. We broke last year’s sales record and once again achieved yet another major milestone’.
Smartphone brands like Samsung, Apple, Vivo, Oppo and Realme also recorded robust sales. The overall smartphone market grew by around 15% during the festive period, industry executives said. Vivo India has sold over 100,000 of its latest flagship model, according to Nipun Marya, director, brand strategy, who said it was a record for the company.
A Realme India spokesperson said sales swelled 15-20%, beyond expectations. Stocks of some products weren’t enough to meet high demand and hence it will take some time to make up losses incurred during the lockdown, he said.
Shift in Consumption Habits
Demand for televisions, appliances, mobile phones and laptops have been spiking since the country eased lockdown curbs amid a shift in consumption habits due to work, study and entertainment at home besides households trying to automate daily chores.
Panasonic India CEO Manish Sharma said sales of products such as refrigerators and washing machines have grown by more than 35% this festive season due to work from home and a greater interest in cooking. He said demand for LED televisions has surpassed supply.
Companies said overall sales would have risen faster if not for supply challenges for products such as televisions, smartphones and laptops.
Buoyed by the improvement in sales during the festive season, apparel makers are hopeful about a faster recovery if the momentum continues during winter.
Levi Strauss & Co managing director for India Sanjeev Mohanty said sales at stores were almost at last year’s level. “Winters have been fuelling hyper growth and we were stacked up high on winter wear which helped,” he said. “However, the key question is whether this growth momentum continues amid increasing Covid cases.”
Aditya Birla Fashion & Retail MD Ashish Dikshit said the company had projected that it will do about 70-80% of last year’s October-December sales and it broadly met that target. On an investor call, he said the company may get closer to last year’s numbers only toward the end of the March quarter.
The festive season is the most crucial period for smartphone, electronics and apparel companies since it accounts for almost 40% of annual revenue. It assumed much greater importance this year due to the pandemic, which battered brands and retailers on account of closures and consumer sentiment plummeting due to job losses and pay cuts.-ET Prime