Consumers still willing to pay for appliances: Survey

28% consumers keen on buying home appliances, says Nielsen study

While saving money may be the need of the hour because of the Covid-19 pandemic, consumers, according to a Nielsen survey, appear willing to set aside some cash for buying durable goods.

The just-released survey says 28 per cent consumers in 12 cities across the country were open to the idea of buying a home appliance in the next few weeks, even as all other discretionary expenditure, including going on a holiday, buying a two-wheeler or a four-wheeler and renovating the house, has been put on hold.

“We wanted to understand what consumers were thinking during the Covid19 crisis, which coincides with the holiday season,” said Prasun Basu, president, South Asia, Nielsen. “While travel, renovation and buying durable goods were significant on their agenda before the crisis began in March, now only buying durable products remains on their list,” he added.

Companies say pent-up demand is huge, prompting consumers to not strike off purchasing durables from their itinerary. “The heatwave has been growing in north India. People require cooling products, such as air conditioners and refrigerators, to tackle the heatwave. Plus, curbs have eased in many states, prompting standalone electronic showrooms to reopen. All this has given consumer sentiment a boost to some extent,” said Kamal Nandi, business head and executive vice president, Godrej Appliances.

While April was a complete washout in terms of sales for appliances, industry sources say May has been better in comparison to April for the market owing to a combination of factors, including pentup demand, reopening of online and offline channels and the hot weather.

Sales of durable items have touched 30 per cent of last year ’s total in the first three weeks of May, executives at various firms said. And June could see sales rising to 50 per cent, which is reasonable, officials said, given the crisis and the tendency of consumers to conserve cash for tougher days ahead.

“Out of the 4,000 retail outlets we are present in, we have managed to reopen in at least 1,900 or 48 per cent of them,” said Krishan Sachdev, managing director, Carrier Midea India. “Nearly 70 per cent of retail outlets are now open, except in cities like Kolkata and Mumbai. Delhi, one of the largest markets in the country, is now open to the extent of 5060 per cent. While Kerala and Tamil Nadu are steadily picking up in terms of sales,” he said.

E- commerce platforms, such as Amazon and Flipkart, are already seeing a sharp surge in orders for products ranging from laptops to smartphones, television sets to washing machines. In a conversation with Business Standard, Avneet Singh Marwah, chief executive officer, Super Plastronics, which makes Thomson and Kodak TVS in the country, said the company had registered 70 per cent more sales via e- commerce this year than last year.

“In offline stores too, especially in tier 2 and 3 towns, sales have surged,” Marwah said. Metros, on the other hand, have been slower in terms of sales offtake mainly because of restricted business hours, he said.

Most durable companies expect the second half of financial year 2020-21 to be better than the first half, provided there is no second wave of Covid-19 infections. “The challenges we are now seeing in terms of the spread of Covid-19 cases in the country could recede after we cross our peak, which is expected around July. This gives us some hope that the festive season will not be muted this year. Consumption could stage a comeback by then,” Nandi said.