Festive season brings cheer to durables companies

NEW DELHI: Despite downturn in the economy, Onam sales in Kerala proved to be healthy for the consumer electronics and durables industry, which now hopes that the momentum will be carried forward in the upcoming festival season in the north that begins with auspicious Navratri and goes on till Diwali. However, RBI's curb on zero-interest financing on sales through credit cards is being seen as a dampener as a substantial portion of festive season sales, estimated at around 15-20%, comes through this route.

Onam sales for most of the companies, like Samsung, LG, Sony and Panasonic, have grown in double digits, giving a hope that the coming festive season will also be good. Ganesh Chaturthi, which is a big draw in Maharashtra, also saw good demand.

"Both Onam and Ganesh festivals have gone well for Samsung. For the Ganesh festival, we registered a growth of 40-45% in terms of our consumer electronics sales, with our premium products like panel TVs and premium appliances registering high growth," said Atul Jain, senior V-P (consumer electronics) at Samsung India. For Onam, the company achieved Rs 250 crore sales. "This is a 25% growth over the previous year," Jain added.

Sanjeev Agarwal, sales head at LG Electronics India, also said Onam sales were good, and across categories. "Contrary to fears that the slowdown may dampen sentiment, sales have gone strong during Onam and have done exceptionally well. We saw a 47% jump in sale of high-end LED TVs, a 32-37% growth in front-load washing machines and a near 30% jump in sale of high-end refrigerators," Agarwal said.

The higher sales are being seen as a positive as these happened despite frequent price hikes this year due to depreciating rupee which increased manufacturing costs.

However, officials said the depreciation of the rupee had in fact benefited in boosting Onam sales. "There is a huge NRI population in Kerala which sends money back home. The depreciation of the rupee meant that the money being sent home increased manifold. This increased disposable incomes that helped in realizing higher sales," Agarwal said.

Panasonic saw flat panel TV sales go up 30% in Kerala. "It was an advantage for all the consumer electronic brands, which achieved their targets especially due to the brisk demand for electronics created by high transfers flowing to households from NRI family members and relatives," Manish Sharma, MD of Panasonic India, said.

Kenichiro Hibi, MD of Sony in India, also said that Onam numbers have been good, bucking any downturn fears. "There has been quite a positive momentum in the market, and our Kerala sales in July-September were at Rs 170 crore, up 34% against Rs 127 crore in the same period last year."