7/27/2021 Con­sumer durables com­pa­nies look to ride the de­mand wave

Con­sumer durables com­pa­nies look to ride the de­mand wave

The Hindu Business Line · 26 Jul 2021

Top con­sumer durables com­pa­nies in­clud­ing LG, Pana­sonic and Go­drej Con­sumer Prod­ucts
are see­ing a sig­nif­i­cant uptick in de­mand for pre­mium prod­ucts.

As peo­ple stay at home for longer pe­ri­ods of time, it is not just house­work ap­pli­ances that are
see­ing an up­grade.
Suguru Taka­matsu, Divi­sional Head, CSD, CE, Pana­sonic In­dia, said, “Con­fined within homes,
con­sumers are now opt­ing for value propo­si­tion prod­ucts that help them multi-task while
adding com­fort, con­ve­nience, con­nec­tiv­ity, and now, safety.”
For LG, the con­tri­bu­tion of pre­mium ap­pli­ances is cur­rently in dou­ble dig­its, with a grad­ual
rise in de­mand for its smart 4K TVs (43 inches and above), con­nected range of ACs (HU se­-
ries), re­frig­er­a­tors (400 litres and above) and wash­ing ma­chines (8 kg or above).
Dur­ing April, com­plaints of on­line ecom­merce plat­forms run­ning out of stock of high-end
home care gad­gets were com­mon. With up­per-mid­dle-class work­ing pro­fes­sion­als forced to
work from home with­out house­hold help, they used their cheque­books to make their house­-
work more ef­fi­cient.
Top con­sumer goods com­pa­nies say that the de­mand for pre­mium cat­e­gory prod­ucts is likely
to sus­tain as the lock­down is slowly lifted.
An­a­lysts opined that this uptick is also a con­se­quence of pent up de­mand for high­end prod­-
ucts, which is man­i­fest­ing as the lock­down eases.
Ka­mal Nandi, Busi­ness Head and EVP at Go­drej Ap­pli­ances, said: “Dur­ing the first 20 days of
July, we have seen de­mand in the pre­mium seg­ment grow by al­most twofold in com­par­i­son to
gen­eral up­take in sales.” There­fore, while sales have grown by 20 per cent over­all, the pre­-
mium seg­ment has seen a 40 per cent growth. This is why Nandi be­lieves that the pre­mium
seg­ment will be an in­te­gral part of the com­pany’s growth and re­cov­ery story.
Re­spond­ing to the trend, Go­drej has al­ready launched or is slated to launch a line of frost-free
and 99.9 per cent germ-free ap­pli­ances. Last week, it also launched its Eon Dish­washer to au­-
to­mate house­work for the work­ing pro­fes­sional.
LG Elec­tron­ics has also seen a 20 per cent higher growth in the pre­mium range of prod­ucts
com­pared to low-end prod­ucts. Deepak Bansal, Head-Cor­po­rate Plan­ning, LG Elec­tron­ics In­-
dia said: “The growth of fully au­to­matic wash­ing ma­chines is high com­pared to semi au­to­-
matic wash­ing ma­chines; dou­ble-door re­frig­er­a­tor com­pared to sin­gle door; and big­ger
screen sizes com­pared to smaller screens. As peo­ple are spend­ing more time at home, they are
look­ing to up­grade.”
Im­pact of low base ef­fect

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7/27/2021 Con­sumer durables com­pa­nies look to ride the de­mand wave

Ac­cord­ing to Natasha Trikha, Re­search An­a­lyst at Care Rat­ings, high growth num­bers in the
pre­mium cat­e­gory could be a bit ar­ti­fi­cial as they are a con­se­quence of low base ef­fect as a re­-
sult of muted de­mand for the pre­mium prod­ucts, dur­ing the first quar­ter of FY21.
More­over, the de­mand for pre­mium con­sumer goods is likely driven by higher in­come groups
who may not care too much about the price.
Thus, the pent-up de­mand due to con­sumers not be­ing able to pur­chase th­ese prod­ucts dur­-
ing the lock­down is clearly man­i­fest­ing here.
In con­trast, the as­pi­ra­tional in­come class will only be pur­chas­ing con­sumer goods that are
es­sen­tial and will be saving up money for a rainy day.

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