Pandemic fuels kitchen appliance makers’ revenues

Kitchens have become busier than ever as people spend more time at home. The trend has propelled the growth of small appliances, and players are back to last year's levels in terms of volume sales, experts said.

“Demand is not a problem. The challenge is how do you fulfil it because there are localised lockdowns. Having said that, the industry is back to last year’s numbers since June. July was down slightly due to the localised lockdowns, but August should see good growth,” Anuj Poddar, executive director, Bajaj Electricals, said.

T T Jagannathan, chairman, TTK Prestige, said with lower dependence on domestic help, people are cooking more, fuelling the growth of kitchen appliances. Daily sales at TTK are back to pre-lockdown levels and revenue share from ecommerce has doubled. “Over the mediumto long-term, we expect revenue to grow in double digits, with the kitchen appliances segment expected to grow fastest in the portfolio,” Jagannathan said.

According to a report by ICICI Direct, Prestige Smart Kitchen stores, which are the company’s exclusive outlets, have seen a sharp surge in average daily sales in June. The trend, the brokerage said, continued into July and August, and is expected to last as consumers remain confined at homes. Analysts said most players were running at full steam in terms of capacity, with most struggling to catch up with demand. Ganesh Chathurthi began on Saturday, kicking off the three-month festive season that will culminate with Diwali in November. Small appliances are typically brought in large numbers during the season.

S Subramanian, MD, Preethi Kitchen Appliances, said the surge in demand has compelled brands to meet higher service and quality standards. The Bureau of Indian Standards (BIS) and the Bureau of Energy Efficiency (BEE) have raised their standards significantly, experts said, forcing players to reassess their portfolios before pushing products into the market.

Poddar said the quality and energy standards kick in from October 1, implying that most firms are racing against time to meet the deadline. “If I have to catch the festive consumer in September-october, my products have to be in the market in August with the quality standards in place. However, officials of the BIS and BEE have been unable to certify products, since many labs have not opened up yet due to the vertical lockdowns,” Poddar said.

Despite the challenges, experts said FY21 will go down as a strong year for kitchen appliance makers, owing to the triggers of growth. According to industry estimates, the kitchen appliances market is pegged at ~20,000 crore, including organised and unorganised players.