Durables shrug off slow start to log dhamaka sales in festive season

KOLKATA: Despite a slow start, sales of television, refrigerator and washing machines grew 8-10 per cent in volume terms this festive season, dispelling industry’s fears that the impact of the Goods and Services Tax would deter buyers from opening up their wallets. GST was implemented across the country on July 1.

Top companies such as Sony, LG and Panasonic said sales rose during Dussehra at the end of September and then again on the weekend before Dhanteras and through to Diwali (October 14-20). Even online-focussed brands reported a spike through the sales run by Flipkart and Amazon during the period, leading to buoyant growth in both online and offline sales.

In large cities, the demand for high-value products such as TVs with screen sizes above 40 inches, frost-free refrigerators, frontloading washing machines and convection microwave ovens overtook entry-level products thanks to consumer loans.


That meant value sales overtook volume growth for some companies and in some segments.

“There was panic amongst the manufacturers that Diwali this year will be a washout, which has been proven wrong,” said Panasonic India sales head Ajay Seth.

“While the double-digit spike in growth rate was missing, still sales were satisfactory as a whole for the industry, considering there was massive sale just before GST in June.” Panasonic sales have grown 30-38 per cent across categories this year.

Retailers offered big discounts in June to clear out inventory ahead of the GST rollout, which led to Diwali-like sales.

These pre-GST sales, along with the 2-4 per cent price hike after GST and a poor start to festive sales with low demand during Onam at the end of August in Kerala and Durga Puja a month later in the east, had led to worries about a dull Diwali.

Sony India sales head Satish Padmanabhan said the spread of consumer finance in smaller towns led to a spurt in the sales of largescreen televisions even in those markets.

“Around 50 per cent of sales were led by consumer finance. In large cities, the 40-inch-plus television overtook smaller screens by unit sales for the first time ever,” he said. Sony reported 20 per cent growth in volume sales and 25 per cent by value.

Even the discounting on e-commerce marketplaces Amazon, Flipkart and Paytm Mall did not impact offline sales.

Mirc Electronics, which owns the Onida brand, said online marketplaces had run out of stock and were asking for more units.

“Though the first online sale during Navratra (in September) was gigantic, the subsequent ones did good business as well,” said Sunil Shankar, business head at Mirc Electronics that owns the Onida brand.

The festive season is the most crucial period for the consumer electronics industry, accounting for 40 per cent of annual sales.

The industry expects the Diwali momentum to persist through the upcoming marriage season and agricultural income flows into rural India.