Big ticket items are driving growth in the consumer durables this festive season: Gfk report
The report shares insights on the top 5 durable categories that drove volume growth of the festive season 2021 and how the trends are shaping up for this festive 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.
According to GfK Market Intelligence Offline Retail Tracking, the top five consumer durable goods that contributed the most volume to growth during the festive season of 2021 compared to their annual sales were televisions (28%), microwave ovens (28%), vacuum cleaners (25%) and washing machine (25%), 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.
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Anant Jain, Head of Market Intelligence- India, GfK says, “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. For select categories, like washing machines, microwaves, televisions, and vacuum cleaners, the festive season accounts for more than 25% of their annual sales. Additionally, electric water heaters also sell more than 30% of their annual volumes during the festive months. 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 second quarter of 2022 (AC, Ref, WM, Microwave).”
The second half of the year also looks promising for consumer durables due to the upcoming festivities in October. Every major manufacturer, retailer, and e-commerce platform is promoting its festive deals. Volume growth in October 2021 was 16% YoY. Sales of all major domestic appliance products are influenced by the festive season, especially during the Diwali months of October and November, and contribute roughly 17–19% of all sales annually. This percentage is more for small domestic appliance categories, at about 21-23%. 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.
As businesses compete for customers by offering incentives, some trends have emerged in the retail landscape. In addition to standard regular discounts, marketers are enticing customers with exchange offers, lucky draws, cashback, gift sets, and extended warranties. 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.
According to GfK’s assessment of industry expectations, some features and innovations are beginning to gain traction as ways to draw customers to new product launches. For instance, the industry anticipates products where design and personalization come together to create the best possible customer experiences. Consumers have responded favorably to smart appliances, which require minimal maintenance and have a wide range of capabilities. Some of the new features in products like refrigerators which include voice commands to play music, check the weather, manage your calendar, and perform other daily stuff. Another example would be washing machines that use AI to detect load size, fabric types and soil levels and will auto-adjust the optimal wash cycle and amount of detergent.
There is similar innovation in the Television category, where it is expected that laser TVs may eventually replace PTVs because they use 30% less energy than PTVs of comparable size (>75 inches), have a better recyclability concept (87% recyclability) and require less material across the supply chain.