Pre-Diwali sales fail to pep up consumer durable cos

Pre-Diwali sales fail to pep up consumer durable cos

Author | Source: The Economic Times | Tuesday, Oct 17,2006 9:10 AM

Pre-Diwali sales fail to pep up consumer durable cos

The mood this festive season with most big consumer electronics and durable marketers is subdued, at best. With Onam and Durga Puja already proving to be a damp squib as far as sales is concerned, marketers are banking heavily on pre-Diwali consumer purchase to achieve their sales targets. But with just four days left for Laxmi Pujan and sales trends showing a mixed picture across different product categories, marketers have their fingers crossed.

“Onam and Puja have been below expectations,” says Vivek Sharma, marketing head, Mirc Electronics, marketers of the Onida brand. In a way, this sales drought during Onam (Kerala) and Durga Puja (West Bengal) was expected, with consumers' preponing their television purchase to coincide with the World Cup Soccer in June '06 in these two football crazy states.

“In June we saw a huge spike, almost 100% over last year, due to the World Cup,” says Girish Rao, vice-president( sales & marketing), LG Electronics India. LG claims to have witnessed a sales spurt of around 20% during Onam-Durga Puja.

Not everyone has been as lucky, though. For PC manufacturer, Hewlett Packard, sales during October have been slightly below expectations despite running attractive promotional schemes. “Although, Onam and Ganesh Chaturthi sales were considerably better, the slowdown has come during Durga Puja time,” says P Krishnakumar, country manager(consumer desktops), HP India sales.

Marketers however, have not given up hope and are doing their utmost to make the remaining ten days or so of this festive season, that extends to early November, count for more. HP's Krishnakumar reasons that the PC category is such that consumers take time to arrive at a decision before purchase, and that HP is still upbeat on Diwali.

“Over the last two-three years we've seen the shopping happens only in the week before Diwali. And we are witnessing the same trend this year too,” points out LG's Rao. LG has reportedly spend Rs 100 crore on marketing this season (August-November).

The markets that are in focus now are North, West and South (excluding Kerala). “We have seen a spurt in our sales in the last few days. Considering that this is just the beginning of the festive season and mobile phones is a popular consumer goods category, we expect this momentum in sales to stay for the coming weeks,” says Sunil Dutt, director of sales at Nokia India.

“I am optimistic this Diwali,” says Sharma of Mirc Electronics, a company that intends to grow by 50% at least. Everyone in the Rs 20,000-crore odd electronics & du-rable industry is banking on higher end products -- LCDs, fully-automatic washing machines, big-sized refrigerators -- to lift their sales realisations this festive season.

“In terms of LCD sales, we have achieved a growth of 930% (over last year) in the festival period. Apart from LCD TVs, the other categories that are doing very well are plasma TVs and frost free refrigerators,” says Ravinder Zutshi, deputy MD, Samsung Electronics.

Even high-end gadgets are selling well, mainly as gift items. “People are gifting mobile phones, camcorders, iPods and mp3 player and this strong gifting sentiment is giving our sales a boost. Corporates too are into it.

We received our biggest order yet, from a telecom company that wanted to gift digital cameras to their employees,” says Alok Bhardwaj, vice-president, Canon. Mobike major Hero Honda claims to have broken all old sales records, selling 20,000 bikes during the Onam month in Kerala.

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