Panasonic, LG, Voltas expect high white goods demand this year; here's why
The industry is hopeful of high demand for consumer durables, especially cooling appliances. In addition to the weather, the rising cases along with the work from home culture is likely to fuel the demand for white goods in the country
With the India Meteorological Department's (IMD) outlook for a warmer than usual summer this year in most regions of India, the industry is hopeful of high demand for consumer durables, especially cooling appliances. In addition to the weather, the rising cases along with the work from home culture is likely to fuel the demand for white goods in the country.
"We are expecting a robust demand for cooling appliances in the backdrop of early and hot summers along with pent-up demand as last year was a washout. For the last 3-4 months, we have witnessed a 25% growth in air conditioners and expect the trend to continue and we are aiming to close Q4 registering more than 100% growth (QoQ)," says Manish Sharma, President & CEO, Panasonic India and SA. It's not just the air conditioners but Panasonic is expecting a record growth of 30% in refrigerators. For the year ending 31 March, 2021 Panasonic is expecting a growth of more than 40% across consumer durables compared to 2019 (year ending March 31st 2020). We are hoping for this trend to continue.
Unlike previous years where the northern states have always been a huge market for air conditioner business, this year Southern and Western states including rural areas are catching up steadily. "In this summer season, we expect more traction in urban and mini-metros, due to the high level of penetration of branded home appliances in these markets. As the pace of electrification increases and the expected trickle-down effect on consumer durables is likely to be witnessed, given the increasing disposable incomes, demand from rural as well as Tier 2&3 cities will increase," says Voltas spokesperson. To address this growing demand, Voltas has taken some key steps like shifting stocking focus to high demand goods, penetration in more rural, less affected zones and increasing the manufacturing capacities.
2nd wave of COVID-19 pandemic
Consumer durables saw strong performance in the first half of March, but after that, it slowed down in some markets in face of restrictions imposed to curb the spread of Covid-19. In response to the increasing number of cases, Delhi, Maharashtra, Punjab, Kerala, Madhya Pradesh, Gujarat, and Rajasthan have declared restrictions until at least April 15. "The industry is still upbeat and expected to register strong growth over April 19 at a national level, in view of the strong heat wave across most parts of the country but some of these affected pockets may witness lower levels of growth given the hesitation on part of retailers to stock up in these areas. The 2nd wave has not yet had a negative effect on consumer sentiment. The industry sales of air conditioners have increased in most parts of India. Given the spike in summer temperatures and with widespread vaccination drive, if we are able to curb the spread of infection, we will witness higher demand for cooling categories. The pent-up demand and continuation of work from home will also create additional demand for cooling products, particularly Air Conditioners and Air Coolers," says Kamal Nandi, Business Head and Executive Vice President - Godrej Appliances.
There seems to be a clear demand for need-based products as consumers seek appliances to ease their daily lives in the new normal. With the second wave of pandemic hitting several cities, people are already looking for white goods including dishwashers, washing machines, refrigerators and microwave ovens, amongst others, that help with the burden of household chores. "We are witnessing good overall pent-up demand for Home Appliances in last few months which is likely to stay buoyant in the coming months too. In fact, with the second wave of Covid-19 pandemic in the country, not only the overall demand is likely to go up but the spike can be very steep for small appliances like Dishwasher, Microwave Ovens, Water Purifiers etc.," says Vijay Babu, Vice President - Home Appliances, LG India.
To facilitate the purchase of cooling appliances, companies have been introducing promotions and low-cost and zero-cost EMI offers.