Indians are buying bigger and better televisions that show pictures up to four times sharper.
That’s partly helped the nation’s large electronics retailers make up for demand lost after the note ban and the new nationwide sales tax. Along with smartphones, said Vijay Sales and Tata Group’s Croma, 4K and OLED flat-panel TVs have been the outliers in an otherwise washout year.
Smartphone sales drove volumes for retailers. More so with Chinese manufacturers selling handsets in the world’s second largest market through brick-and-mortar stores after launching exclusively online, according to Ritesh Ghosal, chief marketing officer at Croma store operator Infiniti Retail Pvt. Ltd. “But the value growth was led by televisions in the higher range.”
Last year’s demonetisation had outlawed 86 percent of the cash in circulation, crimping demand in the months that followed. Asia’s second-largest economy then rolled out the Goods and Services Tax, its biggest reform yet that subsumed multiple levies. While the burden on appliances rose only marginally by about 2 percent, distributors and larger electronics retailers pared inventory to cut losses.
Retailers and electronics makers hoped for the market to recover from the twin disruptions during the festival season and lured buyers with easy-finance schemes. Yet, barring the TVs and mobile phones, the market growth has been “very tight”, said Ghosal.
TVs drove Croma’s value growth to 15 percent while volumes rose 6 percent on smartphones, riding on models like OnePlus 5T, Samsung Note 8, Xiaomi’s Redmi series and Vivo V7 and V7+, Ghosal said.
Vijay Sales attributed falling prices of high-end panels for the growing demand. The overall growth of consumer durables was slower than the previous year, said Nilesh Gupta, managing director at India’s largest electronics retail chain. “Even a single-digit growth is not bad today.”
Appliances makers like Godrej & Boyce Mfg. Co. Ltd. and Whirlpool India Ltd. admitted that there has been a slowdown. Sales rose at 11-12 percent compared to 15 percent in the previous year due to the GST and note ban, Jamshyd Godrej, chairman and managing director at the Godrej Group firm, recently told BloombergQuint in an interview. Whirlpool India Ltd.’s Managing Director Sunil D’Souza was hopeful that the two reforms will have a short-term impact.
For Samsung India though, consumers migrating to the larger screen even in smaller towns was the biggest trend of the year, it said in an emailed statement. Its Korean rival LG Electronics too “strengthened its flat-panel business” riding on demand for its OLED displays.
‘No Innovation In Appliances’
Croma’s Ghosal said bigger televisions did well because there is a new story to it. “People are consuming from the internet. They have access to faster WiFi in their homes, so they are buying larger TVs, buying smart TVs, buying the OLED, 4Ks. There is content to consume now.”
That, according to him, is the problem with over household gadgets. “If you look at home appliances, there isn’t really a fundamental new story to drive sales,” he said. “If I have the desire to upgrade the refrigerator, I also have the ability to wait out another year. Same fundamentals work for air-conditioners and washing machine categories.”