Premium and mid-end products lift festive sale spirit amid inflation woes – know what industry body says

The decline in sales of entry-level products is primarily due to upgrading by consumers and also stress witnessed in the rural market.

Consumers have become conscious of their choices and value-proposition premium appliances are taking precedence in their purchase decisions. (Representative image form Reuters)

Premium and mid-end products have lifted sales of consumer durables and FMCG items this festive season amid inflation woes, according to industry players.

Industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) said the sector is estimated to clock volume growth of 20 per cent and value growth of over 30 per cent.

"Overall mid and premium product sales have done well this festive season. The mid and premium segment has witnessed around 30 per cent volume growth at least and value growth between 40 to 50 per cent this festive season. The last three days were great for mid and premium products," CEAMA President Eric Braganza told PTI.

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However, he said, "Sales of entry-level products are down by 10-15 per cent this festive season."

The decline in sales of entry-level products is primarily due to upgrading by consumers and also stress witnessed in the rural market.

Panasonic Marketing India Managing Director Fumiyasu Fujimori said consumers are looking for a premium range of appliances and the company expects double-digit growth this festive season, led by smart ACs, large-screen TVs and the home appliances category.

"In terms of value growth invertor ACs recorded 38 per cent growth, overall LEDs grew by 10 per cent whereas 4K TVs grew by 34 per cent. Our top-load washing machines registered 13 per cent growth this festive season," he said.

The company is seeing a rise in demand for appliances that are easy to use (allowing users to multi-task), energy-efficient, connected (smart), and healthy and hygienic. Consumers have become conscious of their choices and value-proposition premium appliances are taking precedence in their purchase decisions.

"This growth trend is here to stay," he said, adding, "Keeping that in mind, we are seeing a rise in growth (both value and volume) for inverter ACs, 4K smart LED TVs and top-load washing machines."

In the FMCG sector, HUL Managing Director and CEO Sanjiv Mehta said sales post-Diwali would also need to be taken into account to determine if there has been better offtake in the festive season compared to last year, although sales in the September quarter were higher than the preceding three-month period.

Nevertheless, he said, the premium brands are having greater traction overall in the market than mass brands.

"The premium brands are growing at a faster rate than the popular brands and popular brands are growing faster than the mass brands," he had said during the company's second quarter earnings call.

He explained that growth in the premium category "indicates that people with more disposable income are much more resilient and much more resistant to inflation."

On the other hand, Mehta said, "When times are tough the poor gets hit much harder and people who have more disposable income, they clearly look at if they can get a better value and they'll go on for value packs."

Another FMCG major ITC in its quarterly earnings statement had said input prices remained elevated even as some commodities witnessed softening in the course of the quarter.
"Inflationary headwinds continued to weigh on consumption expenditure which was partly offset by the early onset of the festive season this year in some parts of the country," it said.

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