Haier

Why Appliances Industry Can Hope For A Summer Surge

This summer could bring a double delight for the makers and sellers of appliances, lifting sagging growth after nearly a year and a half.

While the sales of air-conditioners are expected to jump in the south, television volumes are likely to surge across the nation ahead of the Indian Premier League and the cricket world cup, according to Bloomberg Quint’s survey of dealers and retailers. They peg the growth between 5 and 15 percent over the previous summer across a range of appliances.

That comes as an extended winter last year had hurt demand for air-conditioners in the north, causing the inventory to pile up. In general, festive sales for appliances around Diwali, considered an auspicious period for buying, weren’t good as expected.

There has been a lull in consumer sentiment in the last 18 months, according to Nilesh Gupta, managing director at electronics retailer Vijay Sales. The consumer durable industry growth, he said, has fallen nearly by half from about 15-18 percent two years ago to 7-9 percent now.

This year, fresh demand for air-conditioners and coolers will be driven by southern states as the summer takes hold, according to the survey of 16 consumer durables dealers, two large stockists and two electronic retail chains. It was conducted across 14 cities including Amritsar, Bengaluru, Chennai, Guwahati, Hyderabad, Indore, Jaipur, Kolkata, Meerut, Mumbai, New Delhi and Patna.

Demand for voltage stabilisers used to protect appliances against power fluctuations is also expected to jump, the survey revealed. Refrigerators are witnessing traction while washing machines’ volumes are coming off their winter peak.

Here’s what Bloomberg Quinn found about each category of appliances:

Air conditioners, Coolers

While winter has been prolonged in the north, summer has already arrived in southern states, according to India Meteorological Department’s recent weather outlook. Demand for air-conditioners has started growing by around 15 to 20 percent over the previous year with the onset of summer.

South Korean chaebol Samsung Electronics and China’s Haier Appliances Corporation are gaining market share in the mid-to-premium category even as Voltas Ltd. remains the leader. Mitsubishi Electric and Carrier’s smart or connected devices that can be controlled through smartphones are finding acceptance in metros but it’s still a niche market.

Dealers didn’t report any price hikes across the country as they still have a high inventory in the north and the east.

Vijay Sales expects a 15 percent year-on-year rise in air conditioner sales while Ezone expects the growth to be 25-30 percent.

Fans

Fans made by Crompton Greaves Consumer Electricals Ltd. and Havells India Ltd. have seen some traction in demand even as dealers expect a price hike of 2 to 5 percent.

Voltage stabilizers

Demand for stabilizers has already jumped more than 20 percent year-on-year, especially in the south where V-Guard Industries Ltd. dominates. It’s driven by summer power fluctuations and outages that make appliance prone to breaking down.

LED televisions

Dealers expect demand for flat-panel televisions to jump by at least 15 percent in the run-up to the IPL and the ICC Cricket World Cup in May-June-July, especially in north India. IPL is the most-watched sporting event in the country and Team India will be among the favorites to win this year’s world cup being held in England and Wales starting May 30.

Vijay Sales expects television sales to jump 10-15 percent this summer in the cricket-loving nation.

Sandeep Sharma, head of business at Ezone, however, said the euphoria around the two cricket tournaments is yet to start as companies have not started pushing cricket-themed advertising. But he expects it to pick up in the next few days.

Washing machines

Northern and central regions have seen discounts of 10-15 percent across segments as the winter recedes. Dealers BloombergQuint spoke to said demand for washers usually spikes during the winter months in the northern and central India because of the cold wave makes it hard to do the laundry by hand.―Bloomberg Quint

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