Festive Season Brings Hope for Consumer Durables Industry in India
The consumer durables industry in India is seeing a positive shift in consumer sentiments during the festive season, according to a report by JM Financials. Despite a slow start in the second quarter of FY25, the industry is expected to experience a 13% revenue growth.
Challenges in Q2FY25
The second quarter faced challenges such as heavy rains, weak consumer sentiment, and a slow festive start, especially in the southern region with Onam. This led to muted demand for domestic appliances and lower stocking by distribution channels, affecting sales of kitchen and domestic appliances.
Growth Expectations
Despite these challenges, the industry anticipates a 15-20% volume growth due to inventory replenishment. Companies like Voltas and Blue Star are expected to see significant growth, with RAC volumes projected to increase by 25-30%.
Segment Performance
The demand for fans remained soft, but price hikes and improved product mixes are expected to boost revenue growth. The lighting segment faces pressure due to competition and technology shifts, but products like pumps, inverters, and water heaters showed strong growth.
Market Trends
The W&C segment saw robust growth due to price hikes and strong domestic and export demand. In the B2B segment, volume growth exceeded 15%, while the B2C segment saw a 12-15% volume growth due to higher channel stocking. Online platforms and modern trade are gaining market share, indicating a shift in consumer buying behavior.
Doubts Revealed
Consumer Durables -: Consumer durables are goods that last for a long time, like refrigerators, washing machines, and TVs. They are not bought frequently and are used for several years.
Festive Season -: In India, the festive season includes celebrations like Diwali, Dussehra, and Navratri. During this time, people often buy new things, which boosts sales for many industries.
Q2FY25 -: Q2FY25 refers to the second quarter of the financial year 2025. In India, a financial year starts in April and ends in March of the next year.
Voltas -: Voltas is a popular Indian company known for making air conditioners and other cooling products. It is part of the Tata Group.
Blue Star -: Blue Star is an Indian company that makes air conditioning and commercial refrigeration products. It is well-known for its quality and innovation.
W&C Segment -: W&C segment stands for the ‘Wires and Cables’ segment. It involves the production and sale of electrical wires and cables used in homes and industries.
B2B Sector -: B2B stands for ‘Business to Business.’ It refers to transactions where businesses sell products or services to other businesses, rather than to individual consumers.
Modern Trade -: Modern trade refers to organized retail formats like supermarkets and hypermarkets. These stores offer a wide range of products under one roof, providing convenience to shoppers.