Home appliances makers hopeful of good demand for premium products

Makers of washing machines, air conditioners and television sets said that demand for more premium products could drive sales during the festival season which kicked off in northern India on Monday. Consumers are looking for feature heavy and technologically advanced appliances to trade up to better products, they said. 

“We expect the festival season to do well this year. Largely, it is the premium segment which will do extremely well across categories. We have seen those signs early during Onam in the south as well as during Independence Day sales. So, both August and September have seen similar trends wherein the premium segment has done extremely well,” said Kamal Nandi, business head and executive vice-president at Godrej Appliances. 

The company is set to launch over 100 new products, specifically in refrigerators and washing machines with greater focus on the premium segment. “With all these launches that we have lined up, we should be able to target 50% growth overall. In the premium segment we can grow over 80%over the last year. Last year the festive demand wasn’t so good. So over 2019 — we should get volume growth of 9-10%,” said Nandi. 

Nandi said that demand in the next quarters will be driven by consumers who are willing to upgrade their home appliances. However, demand for the mass segment that is driven by entry level products will revive in the last quarter of the current financial year as summers set in, Nandi said.   

Last week, electronics maker Whirlpool released a line-up of premium washing machines for the Indian market. These made in India units will help the company tap into shoppers who are looking to upgrade to better products.  

“There is a medium-to-premium segment where there are consumers who are coming back and they’re actually spending more on what they’re buying. We have seen consumers buy products with larger capacities and buy into slightly more premium products with more features. At the entry level, we are seeing consumers who are far more discerning when it comes to value,” said Vishal Bhola, Managing Director, Whirlpool of India. Demand for the mass segment driven by entry level products will revive in the last quarter of the current financial year as summers set in, Nandi added.   

Whirlpool has invested ₹115 crore to set up a facility that will manufacture premium front-load washing machines at its existing plant in Puducherry.  The move will help the company leverage the premiumisation trend. “We’ve always been in the mass and mass premium segment. Now we’re trying to play much more aggressively in the premium segment,” he said addressing the media last week. 

Meanwhile, in a report released on Monday, analysts at Bank of Baroda said that in the first four months of the current financial year, consumer durable goods registered growth of 19.6% on top of the 76.7% growth reported in fiscal 2021. However, the two preceding years witnessed declines indicating that growth was negative even before the pandemic. Production of major white goods has also remained considerable above the pre pandemic period. 

Meanwhile, television manufacturers said that consumers have been moving to large screen TV sets. 

“In India the market is now shifting from entry level to mid segment and for us we are already very close to 50% of below 32” and 32” screens. By next year it will be a 50-50 share of 32” and large screens as we are seeing a huge spike in large screens and it will continue to do so,” said Avneet Singh Marwah, CEO, SPPL, the exclusive brand licensee of Thomson in India. 

In fact, keeping in the demand for premium products and large screens, Thomson lined up QLED series in 50“, 55” and 65“ screen sizes ahead of the online sales that commenced last week. Demand for televisions sets last year remained sluggish last year. “I think we’ve recovered from there and it’s growing. As a result, 2022 and 2023 look really promising,” he said. 

However, demand for the mass segment that is driven by entry level products will revive in the last quarter of the current financial year as summers set in, Nandi said.   

Companies across consumer goods are hinging hopes on a renewed consumer demand during this year’s festivities. Though makers of consumer durables have seen steady demand for electronics — a shortage in supplies as well as high input prices have ensured demand remains volatile.