Premium home appliances to drive growth this festival season

The pandemic effect appears to be waning as buying momentum for home appliances and electronics has improved in 2022, more so for premium products, the market researcher said in a note.

GfK Market Intelligence Offline Retail Tracking cited data of white goods that led volume growth during the 2021 festival season, which included televisions, microwave ovens, vacuum cleaners and washing machine.

“Based on past trends, these four products are expected to drive the growth of the consumer durable industry growth during this festive season as well,” the researcher that tracks sales of electronics said.

India is witnessing an unrestricted season of festivities after a two-year gap. Consumers are back in stores, looking for upgrades. However, most companies are also noticing better sales at the top-end of the market, indicating that middle-to-low income consumers are likely holding back on discretionary expenses.

Sales of all major domestic appliance products get a boost during the festive season, especially during the Diwali months of October and November. The period contributes roughly 17–19% of all sales annually. This percentage is more for small domestic appliance categories, at about 21-23%.

“As a result of the epidemic outbreak, consumer goods sales have been facing challenges for the past two years, but now things appear to be returning to normal. The fact that certain significant sectors experienced strong double-digit growth in Q1 of 2022 is proof that the offline market has received a stimulus with shoppers moving back to the market to shop,” said Anant Jain, Head of Market Intelligence, India, GfK.

With a 17% volume gain over the prior year in July 2022 and a 21% increase in value for major domestic appliances, consumer durables enjoyed a good start to the July-September, said Jain.

This trend is likely to continue into the festive season quarter.

During the forthcoming festive season, healthy growth and recovery of the early months lost owing to the third wave in January and February ’22, is anticipated, GfK said. The trend of premiumization is expected to continue this festive season as Indian consumers continue to seek products that provide superior performance and user experience.

Consumers have responded favorably to smart appliances, which require minimal maintenance and have a wide range of capabilities, it added.