April likely to be a washout for appliances
April is turning out to be a challenge for appliances makers as curbs to curtail the spread of Covid-19 is hurting business badly. April is a crucial month in the annual calendar of appliances majors, since it kicks off their summer season sales.
It contributes close to 15 per cent of sales in the June quarter. This is partly because of festivals such as Gudi Padwa in Maharashtra, Ugadi in Karnataka and Baisakhi in Punjab. This year will see Ramzan begin on Wednesday. On the other hand, Ram Navami will be celebrated next week. During Ramzan, Muslims break fast in the evenings, using the time to shop and eat. As such, festivals are an occasion for people to step out and shop, which has not happened this April due to curbs.
Durables players admit that restrictions have hit festive sales. “There were no Padwa sales this year because non-essential retail has been shut in Maharashtra,” said Kamal Nandi, business head and executive vice-president, Godrej Appliances.
Nandi is also president of the Consumer Electronics and Appliances Manufacturers Association, an apex body of durables firms in the country. The body has been monitoring the situation closely, since the summer season constitutes a third of industry sales.
A cross-spectrum of cooling products depend on the summer season for sales, including air conditioners, coolers, freezers, refrigerators and fans. While temperatures have been soaring across various parts of India, firms are finding it difficult to meet demand in the marketplaces.
Shekhar Bajaj, CMD, Bajaj Electricals, which makes air coolers and fans, said localised lockdowns across key states have hit production and supply of goods. “It becomes difficult to move components and parts to factories where there are localised lockdowns. We are seeing it happen in Maharashtra. Movement of finished goods, too, is a challenge,” he added.
Maharashtra, which contributes between 12 and 15 per cent of appliances sales, on Tuesday announced lockdown-like curbs, meaning there will be no business for the second half of the month as well from the state.
Kanwal Jeet Jawa, MD & CEO, Daikin India, said: “We were just coming out of a tough phase, triggered by the first wave of Covid-19. At the same time, challenges, such as price hikes, due to commodity inflation, were there. Now, these lockdowns are happening. The industry will see a set back on account of this.”
Durables’ retailers said they were seeing a month-onmonth recovery since the festive season of 2020. “There was pent-up demand, which helped us grow month-onmonth between October and March,” said Nilesh Gupta, director, Vijay Sales. “However, from April, the scenario has changed. Business has been weak,” he added.