Festive Sweepstake

Sparks could fly in the white goods space this Diwali. For an industry just emerging victorious from implementation of value added tax VAT...

Sparks could fly in the white goods space this Diwali. For an industry just emerging victorious from implementation of value added tax VAT, the economic aftermath of the tsunami and a series of hurricanes in India, the second half of 2005 is full of positive signals.

8216;8216;The industry has not done very well in the first half of the year, and that is due to several reasons such as the implementation of VAT and a series of national and international calamities. The overall sentiments were also low. But in the second half, I don8217;t see any negative sentiments. We are absolutely bullish, in fact,8217;8217; says Girish Bapat, Vice President, Marketing, LG India.

The economic backdrop to the festival season is positive too, and players in the sector are counting on a good innings over Onam in the South and Durga Puja in the East to hold them in good stead 8212; at least till next January. 8216;8216;India8217;s consumption bill is worth 200 billion, the GDP is racing for 8 per cent and a triple whammy of festivals 8212; Dussehra, Diwali, Ramazan 8212; will rule the market from October 5 to November 10,8217;8217; says S Nagesh of Shopper8217;s Stop.

Right now, retailers are gearing up to find numbers in new segments that the middle class consumers have developed a taste for over the last five years. Though few agree that flagging sales of Plain Jane colour TVs and two-in-one stereos will dampen Diwali sales, none deny that the biggest numbers are coming from plasma TVs, high-end home theaters, DVDs, MP3 players, microwaves, washing machines and high-tech refrigerators.

8216;8216;So far, growth has been less than two per cent in some segments, but at the same time, the economy is booming. Our expectation is that there will be superb sales over Dussehra, Diwali and Ramazan put together. A very positive mood is expected in the industry as a whole,8217;8217; says Haier India managing director TK Banerji.

Every company serious about the Diwali season has something or the other to offer its customers, whether it is aimed at pulling new eyeballs or grabbing customers from existing players. 8216;8216;The trick, this season, is to reap benefits of the mantra of awareness, availability and affordability. We expect this to be an excellent season,8217;8217; says a Samsung India spokesperson.

A high-decibel series of sales campaigns from every serious player is currently underway, from Samsung8217;s Pehla Kamaal Doosra Dhamaal campaign which is costing the company Rs 60 crore, to LG8217;s Mangal hi Mangal offer which too, comes with a Rs 60 crore bill.

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Both the players have targeted massive sales: While Samsung wants to come up with a season turnover of abour Rs 625 crore. LG is counting on Diwali delivering Rs 1,500 crore turnover.

In addition, new-age Indian consumers want colour TVs, music systems and refrigerators. But they also want the TVs to be LCD or plasma. Top-end home theatres, DVD-MP3-VCD-combos and anything that walks the tightrope between utilitarian good looks and aspirational feature intensity is suddenly the rage.

The industry has also realised that it can8217;t keep offering the same products to get better results. Each serious contender has a DVD player, MP3 player, microwave and washing machine on offer. What8217;s more, each of these devices now suit different pockets.

8216;8216;People will not just buy an ordinary TV any more. That is why the high-end LCD and plasma TV segment has been growing at 40 per cent or more, though regular TV sales have stagnated. LCD TV sales doubled compared to last year,8217;8217; says the Samsung spokesperson. DVD sales are also going through the roof, and though the overall TV segment is showing a 1 per cent growth, flat TV sales have jumped 64 per cent. 8216;8216;Higher end devices are doing very well, whereas lower end devices are stagnating.

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The total size of the CTV, home theatre, LCD, plasma segment is India is currently pegged at 1,00,000 in India.