LCDs, laptops are flying off shelves

Ashish K Tiwari & Tanvi Shukla

MUMBAI:Anoop Shukla, an IFS officer, has been dreaming about owning a liquid crystal display (LCD) television for some time now. Last year, the hefty price-tag kept him from buying one. This year, the situation is completely different.

“Thanks to the bull run on the bourses, I made Rs1.25 lakh trading shares over the past month,” says Shukla enthusiastically. The timing of the Sensex pole-vault, from Shukla’s perspective, couldn’t have been better. With the festival season just around the corner, his family is all set for a shopping spree.

While Shukla plans to transform his dream into reality, his 21-year-old daughter Shiti has her eyes set on the latest Sony Vaio laptop, which now comes in brand new colours. 

The Shuklas aren’t the only ones channelling gains from a roaring stock market into liberal purchases of consumer durables and other goodies. According to Ranjit Raliyaram, store manager, Sony Mony Electronics, in the western suburb of Vile Parle, the mood is upbeat and customers are more open to splurging this year.

“The festive shopping season has just begun with the onset of Navratri and the kind of footfalls we are witnessing is incredible,” says a thrilled Raliyaram.

So what’s hot with consumers this festive season? A quick survey by DNA suggests that television sets, laptops, DVD players, home theatre, high-end refrigerators, digital cameras and camcorders top the consumer’s shopping list this year. Microwave ovens, washing machines and dishwashers form part of the secondary list of products.

While volumes will certainly come from the CTV category, Pantaloon’s consumer durables and electronics retailing arm, eZone, sees sales of LCD TVs going through the roof this season.

Manoj Kumar, chief executive of eZone, says he expects LCD sales growth to be in the region of 400-500% compared to last year. “Prices of LCDs have come down drastically. An entry-level 32-inch LCD that was sold in the range of Rs80,000-90,000 last year is now available for Rs40,000-50,000,” he points out.

A similar trend has been witnessed in the DVD (digital video disk) player category. Entry-level DVD players now cost just about Rs2,000-3,000. The story is similar with entry-level laptops, where prices have fallen well below Rs30,000 – less than what a desktop used to cost a couple of years ago.

So what’s happened to mobile phones, Apple iPods, Microsoft’s Xbox and Sony’s Playstation that have been tickling the markets pink ever since they were launched? Are they losing charm this festive season?

Offering an insight is Ajit Joshi, chief executive and managing director of the Tata group’s consumer durables and IT retailing venture, Infiniti Retail Ltd, which operates the Croma branded stores.

“These are lifestyle products with round-the-year business and are not driven by festival buying any more. They have attained fashion accessory status and are part of the impulse buying category. Having said that, some amount of extra sales cannot be ruled out during the festive season,” says Joshi. Joshi sees Croma sales this festive season rising by 30-40% over last year’s figures.

Delving further into consumer buying habits, Tara Prabhakar, associate director of Mindscape-Technopak, a consumer behaviour research firm, separates purchase decisions into two categories: status-oriented and indulgence-oriented.

Prabhakar lists CTVs/LCDs, refrigerators, washing machines, dishwashers, microwave ovens and DVD players in the status category. Indulgence-oriented products include plasma TVs, state-of-the-art home theatre systems, iPods, high-end digital cameras, camcorders, and gaming consoles.

“Consumers in the status category buy because they need to maintain a position in their social group. Indulgence-oriented buying happens with those who want to enjoy life better with products that meet their requirements. When it comes to the festival shopping season, it is primarily the status-oriented segment that contributes largely to the retailer’s cash register,” adds Prabhakar.

While mall owners expect the entire gamut of offerings in the consumer durables space to sell well this season, the fraternity is unanimous that the television category will outperform every other durables product this season.

Box2: No end to freebies

Contrary to media reports that the consumer durables industry is focusing more on launching new products and less on discounting and free gifts this year, DNA found competition is forcing many manufacturers to slowly roll out a long list of freebies, along with new products, for their buyers. Here’s a sampler:

Samsung: The total value of gifts being provided during the festival period is estimated at Rs35 crore (Source:
Moneycontrol.com). Gifts to Samsung consumers range from glass and dinner sets to direct-to-home (DTH) set-top boxes.

The latter are being provided with all 32-inch and above LCD TVs. For LCD/plasma televisions of screen sizes above 46-inches, the company is also offering a free installation coupon along with a set-top box.

Sony: Having tied up with the makers of the upcoming movie Saawariya, the company offers free audio CDs and DVDs of the movie, and a chance to attend a party with the cast of the movie.

Whirlpool: Has launched new models of frost-free refrigerators and microwave ovens, targeting a 20% sales hike this season. On purchase of 30 specific Whirlpool products, consumers get design consultation by reputed interior designers and architects, plus vouchers for discounts in areas such as furnishing, house painting, refurbishing, flooring and carpeting.

Haier: This Chinese giant offers a four-day trip to the Beijing Olympics in 2008 on a lucky draw basis. Promotional offers also involve assured gifts for purchases above a certain value on specified products, including ACs, microwave ovens, LCD televisions, fully-automatic washing machines, et al.