Consumer electronics sales sparkle this Diwali

Despite holding pre- and post goods and services tax (GST) stock clearance sales, manufacturers and retailers of consumer electronics are looking at a healthy double-digit growth this festive season.

Consumer buying sentiments in the pre-Diwali season, industry players said have been encouraging and taking into account the consumer turnout in the last few days, the expected business growth is anywhere between 15% and 30%.

Amit Gujral, chief marketing officer, LG India, said GST has not changed any consumer behaviour and has had no impact on festive sales as far as LG is concerned. "Festivities started with Onam down South and LG witnessed 30% growth in business followed by another 27% growth over last year due to festivals like Ganeshotsav, Navratri, Durga Pooja, Dussehra. We are certain the festivities ongoing shall have continued buying behaviour from consumers and we are hoping to garner double digits growth as compared to previous years," he said.

Echoing the sentiments, Rishi Suri, director - consumer electronics (CE), Samsung India, said, their digital appliance business will continue to exhibit strong growth this festive season. "A healthy double-digit growth is expected from our television, refrigerator, air conditioner, washing machine and microwave categories across India. Samsung introduced innovative products this year in line with the specific needs of the consumers and are expecting 30% above growth in the CE category this festive season," said Suri.

The positive sentiments are mirrored by retailers of consumer electronics products operating stores across the country. Reliance Retail, which operates stores in over 750 cities in India, said that while GST brought uncertainties for a brief period around the implementation period those issues are well settled now.

"We see strong buying across geographies and consumer segments during the pre- and Diwali season sale. In electronics category, we see buying in consumer durables, mobile phones, HETV among various other categories. In fashion, we see consumers buying fashion led merchandise across apparel, everyday jewellery and accessories," said a Reliance Retail spokesperson.

Kishore Biyani's Future Retail, which competes with Mukesh D Ambani's Reliance Retail, said that pre-festive season sale is going extremely well since the last one-and-a-half months now. "This is particularly true for fashion segment, which is performing really well. The last 10 days have witnessed good traction in homeware, home fashion, food and electronics. The average ticket size for the pre-festive season has seen a high growth of 40-50%," said a Big Bazaar spokesperson.

Tata group-operated Croma retail chain said that an improved customer buying sentiment post-GST, has already resulted in a record growth this Diwali period. Ritesh Ghosal, chief marketing officer, Infiniti Retail Ltd, which runs Croma, said, "The premium segment continues to witness strong demand with a higher double-digit growth as we expect categories like 50 inch plus LED TVs, smartphones and high-end laptops to witness strong traction in the market this season. With the on-going festive season, the consumer sentiment continues to remain positive and we are optimistic of maintaining this positive trend with robust growth buoyed by the aspirational values we are offering customers."

The consumer buying behaviour, according to Nilesh Gupta, managing partner, Vijay Sales, is similar with all the 70 Vijay Sales stores across Maharashtra, Gujarat, Delhi and NCR. "Pre-Diwali sales have picked up, which is evident from high consumer buying on Sunday. We are expecting 15% growth in sales this Diwali compared to last year driven by LED televisions and mobile phones," said Gupta.

While business has picked up in the last few days extended monsoons (particularly during the peak shopping hours in the evening) is impacting sales, said Kaniya Mulchandani, promoter, Snehanjali Electronics, a retail chain of consumer durables and electronics products. "Numbers clocked so far are indicating towards a minor de-growth compared to pre-Diwali sales last year. We are hoping the situation to turnaround over the next few days," said Mulchandani.

The e-retailers are equally buoyant about traction from e-shoppers on their respective e-marketplace platforms. The fight for a higher market this time revolved around just two e-commerce players i.e. Flilpkart and Amazon amongst other players including Tata CLiQ, Paytm, Shopclues and Snapdeal.

A Flipkart spokesperson said that the company had prepared well in advance to be able to grab a sizeable pie of the online sales this season. "We introduced the first of its kind 'No Cost EMI' facility on debit cards right before online sales were being launched. This not only helped grow the market but also give us a huge market share of 70% this sale season. Our sales have increased two times compared to last year and were driven by mobile phone, lifestyle and large appliances (television and home appliances).

On the other hand, Amazon India said that this festive season has proved to be its biggest so far. "We have seen significant expansion in India with focus on not only growing the existing customers' share of wallet, purchase frequency but also in driving incremental new reach and penetration through market expansion. With over 99% of serviceable pin codes in India placing at least one order on Amazon.in during the festival sale clearly showcased an inflection point for e-commerce in India," said a Amazon India spokesperson adding that non-metros continue to be the driver of new user growth with share of new customers in non-metros moving past 86% in 2017.

The non-metro phenomenon is equally true for physical retailers with national footprint who said that rural markets are witnessing better growth compared to urban. Retailers said that consumers in small cities have become fashion and technology savvy with rapidly rising education levels, exposure to western broadcast media, steady growth of urbanisation and rising disposable income.

"Some of the best growth markets are Tier II and III cities which have historically been underserved by organised retailers," said the Reliance Retail spokesperson, adding that manufacturers have also adjusted the prices of various products depending on the tax implications arising out of GST and that has helped boost market sentiments.

Rural markets have seen a growth of 20-25% more in comparison to urban market and this has been happening for the last two years now," said a Big Bazaar spokesperson.

While the pre- and Diwali sale season is currently on, this will be followed by a busy wedding season, which is a big buying period for consumers. Last year there was a major disruption in the market due to demonetization in November. And with that issue already settled the consumer sector is expecting strong year on year growth across all consumption baskets.