Electronics and consumer durables have bounced back post lockdowns, selling despite a rise in prices and short supply, and surprising retailers and experts.
Retailers, having feared a bleak year ahead, say post-lockdown recovery has been surprising and that they now expect to meet their targets for the year. That’s if a third wave of the pandemic doesn’t happen.
“It has been a very pleasant surprise that recovery has been better than last year,” said Nilesh Gupta, director of Mumbai-based retail chain Vijay Sales. “If I compare post-unlock last year to this year, this year has been better. I have no clue why, because logic told us that it will not happen and it will be a tough recovery.”
Gupta said he has seen growth “over last year” in laptops, a market that saw massive growth last year due to remote work requirements. Overall growth has been 10-15%, he said, adding that sales are good across categories. Vijay Sales expects to hit its targets for the year if there’s no third wave.
Manish Khatri, partner at Mahesh Telecom, said demand hasn’t waned, so the only problem retailers may face is shortages. The consumer electronics industry has struggled to keep up with demand since lockdowns ended last year, due to a crippling shortage of chips globally and other supply chain constraints.
Smartphone makers, including Xiaomi, Realme and Oppo increased prices of some devices earlier this month. Industry executives said that prices of smartphones in India could go up by ₹100-1,000.
In a statement earlier this month, Xiaomi India said it plans to increase the price of smart TVs by 3-6% from 1 July, while a Twitter post from Mahesh Telecom earlier this month shows ₹500-1,000 hikes in the price of some phones by Oppo.
Gupta noted that this rise in prices improved top-line performance for retailers, which is perhaps why they have seen larger growth since the 2021 lockdowns as compared with 2020.
Despite all these constraints, consumers seem to continue buying electronics and consumer durables. “There is a supply shortage, but it’s not at the category level,” said Gupta. He said while consumers may not get a specific brand, they still have other brand options to choose from. He said the fear of a possible third wave is pushing some people to buy consumer durables now, instead of waiting.
To be sure, Navkendar Singh, research director at the International Data Corporation, cautioned that the numbers are only good compared to 2020. Second quarter shipments for 2020 dropped by almost 50% as compared with 2019, while the third quarter was the largest ever for the country. Those numbers will likely be missed this year. Live Mint