There will be aggressive freebies and ancillary offers for customers this festive season. Consumer appliance makers say customer sentiments are weak, and they are likely to be forced to bank on good offers.
Companies are also waiting to see whether the government stimuli will make consumers loosen their purse strings in the run up to Dussehra and Diwali.
“Usually during this time, consumers are looking for more freebies with their purchases. While this is not uncommon, we have been more aggressive this time with such offers,” said Vijay Babu, vice president of LG Electronics’ home appliances and air conditioner business.
Onam sales in Kerala, one of the key festive season trend indicators, were not good, partly due to heavy rains and floods in the southern state. While sales have been relatively better in September, it is unclear whether the tempo can be sustained for the next two months.
LG said it is providing vacuum cleaners with washing machines, one-year extended warranty for front load washing machines, and even five-year extended warranty for semi automatic machines. Panasonic India will offer extended warranties and combo schemes across categories, Harshal Soman, business head of home appliances, said. Both LG and Panasonic have aggressive sales targets for the season.
Godrej Appliances is lowering down-payments and providing longer repayment times. “In this period of liquidity crunch, consumer finance offers will be our target area,” Kamal Nandi, VP of Godrej & Boyce, said. Nandi said the environment has improved in September. “But unless we have some great stimuli, it will continue to be challenging,” he said.
India is witnessing a slowdown across sectors and the pinch is being felt by the retailers and FMCG players, Rural consumption has declined sharply.
“Most consumer appliance firms would be happy if they can get an increase of 5-7% compared to last year’s 12-18%”, said Kumar Rajagopalan, CEO of Retailers Association of India(RAI).
While brands have been hit sharply, it’s worse for brick-and-mortar retailers, who have to deal with both the slowdown and the fierce competition from e-commerce. The latter has already cornered a significant proportion of mobile and television sales. Pai International Electronics, one of the major retailers in Karnataka, Telangana and
Andhra Pradesh, has seen sales drop 20% this fiscal compared to last year due to lower footfalls. “We have no option but to take a cut on margins, which may drop about 5% (during the festive season),” S Rajkumar Pai, managing director, said. Times of India