Consumer goods firms get their mojo back

Consumer goods sales have managed to regain growth momentum, thanks to festive season sales, mostly through online channels, the Business Standard had reported. After nearly two years of pandemic-related disruption and weak economic activity, sales in all major consumer categories have increased significantly, it said. Most consumer goods categories, from packaged foods to home appliances and personal devices, have grown by 10-15% compared to last year’s flat sales.

While sales through traditional locations stayed higher YoY this time, e-commerce platforms saw tremendous increase.

Between October 2 and October 10, online sales increased by over 25% to Rs 32,000 crore, up from Rs 26,000 crore last year, according to consultancy firm Redseer. The figure is up 68.4% from pre-pandemic levels in 2019.

Sales of fashion and clothes, appliances, and electronics items other than mobile handsets have increased dramatically as customers adapt to online shopping throughout the pandemic.

Sales of Superplastronics’ smart TVs and washing machines have increased by more than 50% this festive season, particularly through big e-tailers like Flipkart, the report quoted Avneet Singh Marwah, CEO, as saying.

“In anticipation of future festivals such as Diwali, Indian consumers are demonstrating an increased willingness to spend discretionary funds. As a result of the pandemic, there has been a considerable movement toward online shopping, and internet festivals such as the Amazon Great Indian Festival and Flipkart Big Billion Days offer shoppers attractive discounts,”  the Business Standard report quoted Porus Doctor, partner and consumer industry leader, Deloitte Touche Tohmatsu India, as saying.

Premium products drive sales

While retailers expect the Christmas shopping rush to last through Diwali in early November, early indications suggest that sales growth will be weighted towards premium categories. According to major appliance and electronics manufacturers, consumers are upgrading to larger and more expensive devices during the holiday season, while sales in lower price bands are stagnant. Automatic washing machines, both top-load and front-load, are seeing double-digit sales increase, while semi-automatic goods are seeing single-digit growth.

Sales of 4355-inch ultra-HD sets are the fastest in the smart TV category, followed by 65-inch sets. While refrigerator sales are greater than 350 litres, and are up 20%, compared to direct cool models (less than 200 litres), which are up roughly 5%.

Industry executives in the packaged goods sector have noticed similar tendencies. Sales of premium items are expanding the quickest in the vital categories, the report quoted Mayank Shah, senior category head at Parle Products as saying.

Most major consumer goods manufacturers, on the other hand, are optimistic that as the holiday season approaches, attitude in the lower strata will improve as well.

“PepsiCo India is at a critical juncture. As limitations loosen, we expect an increased push for in-home consumption in addition to out-of-home usage,”  the report quoted a PepsiCo India spokesperson as saying.

This time, the firm has launched region-specific, limited-edition festive bundles in West Bengal and Gujarat for Durga Pujo and Navratri, respectively, in anticipation of greater sales and “with a goal to embed deep in the marketplaces.”

Consumer morale will increase as the holiday season approaches, thanks to improved mobility and expanded vaccine coverage, the report quoted Adarsh Sharma, Executive Director (sales) at Dabur India as saying.

“This Christmas season, food and beverages are predicted to lead to an increase in demand which is expected to be greater than last year,” he said.