Due to erratic weather, including unseasonal rains, the consumer durable industry witnessed a 7 per cent degrowth in the cooling product categories between April and June. 

Companies that were betting big on an uptick in summer sales had ramped up the production of cooling products.

“There is a strong correlation between rise in temperature and sale of products such as air conditioners, refrigerators, air coolers, and deep freezers. April and May were affected by unseasonal rains, especially in the north. However, June sales trends were much better as several regions across India witnessed soaring temperatures and heat waves. Godrej Appliances’ cooling categories grew over 25 per cent in Q1. We closed Q1 with over 80 per cent growth in AC sales in comparison to last year,” said Kamal Nandi, Business Head and Executive Vice-President of Godrej Appliances, which is part of Godrej & Boyce. 

According to Axis Securities Equity Research, overall demand from consumers remained tepid during the quarter. 

“Seasonal products such as fans, coolers, and ACs witnessed lacklustre demand. Washing machines, and lighting (B2C) witnessed a muted demand environment,” states the quarter preview. 

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While the demand for entry-level products was moderate, premium products and mid-premium products continued to gain traction in the quarter. 

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“June saw an uptick in AC sales, which grew by 28 per cent compared to the same period last year. Last year was an anomaly, where the economy gradually returned to normalcy,” said Fumiyasu Fujimori, Managing Director, Panasonic Marketing India of Panasonic Life Solutions India. 

Premium and localised demand

While there was degrowth for cooling products overall, companies pointed to the demand uptick for premium and mid-level premium products during the season.

“We planned to cater to demand across regions, even from non-AC markets. We successfully manufactured over one million frost self-clean air conditioners this summer, owing to demand surge,” said Satish NS, President of Haier India.

“The premium segments across categories continue to witness growth,” added Nandi.

There was also an uptick in demand for products in specific locations across the country.

“We witnessed a patchy summer due to the El Nino effect; in places affected by heat waves, we quickly leveraged the localised demand, thanks to our wide distribution and retail reach,” said a Voltas spokesperson.

Festive season

Sale of consumer durables is expected to pick up in August with the start of the festive season, and consumers can expect big discounts due to inventory pile-up, according to Axis Securities Equity Research.

“We anticipate an uptick in sales within the industry as the festive season approaches in the second half of the year. We are expecting the sale of refrigerators and other appliances to pick up, and are preparing for AC sales in the next year,” added Fujimori of Panasonic. 

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