The consumer goods sector may be riding on the back of consumption boom in the country, but the consumer durables industry has ended FY06 on a false note. Among the major product categories, CTVs and washing machines have reported sharp decline in growth on the back of double-digit growth during FY05.
However, one positive side to the durables story has been the improvement in growth rate and pricing power for refrigerators. As per the latest ORG-GFK data, colour televisions recorded a growth of 7.7% compared to 17% during FY05.
Similarly, washing machines, which had recorded a high growth of 17% in 2004-05, has gone back to its old days of low single-digit growth rate. For FY06, the category reported just 3.9% increase in unit shipments.
Refrigerators, which had got stuck to a low growth tangent, has reported a pickup in demand. Growth rate in unit sales increased from 5.7% to 7.7%. What's even more interesting is the return of pricing power for refrigerators as manufacturers toned down their price war last year.
Value term growth was pegged higher than the volume growth rate. Growth rate for refrigerators in value terms moved up from 5.2% to 8.5% on an year-on-year basis. This is also reflected in the improvement in financial performance of appliance majors such as Whirlpool.
Other emerging categories such as microwave ovens and DVD players continued to clock high double-digit growth rates.
Though some brands increased their respective market shares in certain categories, the Koreans continued to rule the durables industry with LG leading in all product categories.
Among the other significant players which clocked marked gains in market shares include, Philips, Sony and TCL for colour televisions.
For refrigerators, the big gainers were Samsung, Whirlpool and LG. Here the big loser in market share was Godrej. In case of washing machines, the gainers among the large players include Samsung and Onida.
The underperformers in the washing machine category include LG, Whirlpool, Godrej and IFB. Among the other trends, the top-end of all product categories continued to outperform in the growth charts.
For instance flat televisions clocked high growth of about 80% in unit terms even as the market for conventional curved screen CTVs almost shrunk to one-third its size. Similarly, while the market for direct cool refrigerators was just about static frost free refrigerators recorded 30% growth.