Mobiles, home appliance makers seek ‘essential category’ tag

Mobile phone players and home appliance makers are reaching out to state governments seeking the essential tags as COVID-19 related restrictions continue to be imposed across the country.

Local restrictions have resulted in electronic stores being shut in most parts of the country and e-commerce deliveries limited to essentials only in Maharashtra and Delhi.

Home appliance makers are now making representations to state governments arguing that home appliances such as air conditioners and refrigerators are essential, especially when people are at home.

“There are two types of essentials. One is food, grocery which are basic needs and the second level is those that aid convenience, and home appliances fall in that. Appliances aid the healthy living. People need refrigerators to preserve food, ACs to be more comfortable while working and studying at home, washing machines to ensure they’re cleaning clothes properly, and so on,” says Kamal Nandi, business head of Godrej Appliances and president, Consumer Electronics and Appliances Manufacturers Association (CEAMA).

Ritesh Ghosal, chief marketing officer at Croma, and Nilesh Gupta, director, Vijay Sales are also of the same opinion – that consumers require appliances to make homes more liveable.

Gupta said apart from sales, repairing and after-sale services at least should be allowed to ensure convenience to consumers while working or studying from home. These retailers are currently sitting on large unsold inventory due to the lockdown restrictions, taking a toll on their sales.

“All sales are paused, which has a big impact on business. In places like Delhi and Mumbai, we are not allowed to sell online either. We are down to a third of the business we normally do, also because in other cities and towns as well, there are restrictions like limited hours of being open,” Ghosal said.

The impact is larger for appliance makers as summer is the peak season for cooling appliances. The industry, which saw bumper sales in the January-March periods thanks to early summers in most parts of India, stocked up in anticipation of good sales over the next few months.

“In summers, items like fans, coolers, AC are all essential. In the January-March period, we witnessed growth in office communication (like printers, laptops, and related accessories) by over 100 percent over PY,” Arvind Mediratta, managing director and chief executive officer, METRO Cash and Carry India, said.

“Double-digit growth in categories like cooling (Fan and ACs), juicer mixer grinder & kettle which grew by over 16 percent, lightening by 14 percent, refrigerators by 10 percent in January- March period over PY. However, our sales have been impacted due to restrictions on the sale of these categories termed as ‘non-essential’ in states like Maharashtra, Karnataka, Delhi,” Mediratta added. He is also chairperson of the Retail and Internal Trade Committee, FICCI.

Even before home appliances, smartphone makers, represented by the India Cellular & Electronics Association (ICEA) wrote to the Maharashtra chief minister Uddhav Thackeray and Delhi’s chief secretary Vijay Kumar Dev last week seeking inclusion of mobile phones, laptops, and other communication devices within the ambit of essential goods and services.

It wrote in the letters that mobiles and other communications devices ensured continuity of life and operations during several stringent lockdowns. It put forth ten different arguments on the need for the essentials tag for the industry. This included reasons such as usage of mobile phones, laptops, etc for the functioning of government, state, and civic machinery, for communication between individuals and government health services, facilitation of social distancing in the workplace arena, access to socially distanced healthcare, grocery, and provisions, among others.

It also sought exceptions for after-sales servicing of mobiles, laptops, and tablets and that along with these servicing stores, mobile phone retailing stores be allowed to open as well.

“We should not deprive the traders of their livelihood and citizens the opportunity to buy and upgrade. We have seen that the same can be done in a calibrated and safe fashion,” ICEA wrote.

However, mobile retailers don’t seem to be on the same page as the ICEA. Days after they wrote to Maharashtra and Delhi, the All India Mobile Retailers Association, which represents 3 lakh smartphone and mobile servicing stores across India, wrote to finance minister Nirmala Sitharaman saying this is not the right time to make mobile phones essential.

“When the government changes the product category, then as a policy all 1.50 lakhs shops will open along with thousands of distributors and since we provide direct employment to 15 lakhs people, all those will come to the market and might get infected acting as carriers of that infection for their families,” AIMRA wrote.

Speaking to CNBC-TV18, Arvinder Khurana, National President of AIMRA said the need for mobile phones and electronics is not as strong as last year as people equipped themselves with electronics they need to work and study from home.

“Currently, people are running around for beds and oxygen, and not mobile phones. If 3 lakh stores open, it will lead to too many people risking exposure to the virus. So, despite facing immense financial difficulty over the past year and losing out to online platforms, we retailers have decided to keep stores shut until things better,” Khurana added. CNBC-TV18

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