Why Consumer Durables Sales Are Still Under the Weather? Unseasonal rains have impacted demand for some of the consumer durable products, although lowering input costs have helped, volumes would continue to remain a challenge resulting in price pressures

Erratic environmental conditions wherein consumers continue to struggle and adapt to the changing weather patterns have not only caused health concerns but has also impacted demands for some of the consumer durable products in the first quarter and the effect might linger long.

"Unseasonal rains have impacted demand for some of the consumer durable products in the first quarter, but the industry should have recovered a bit in June given the monsoon delay. Although lowering input costs have helped, volumes would continue to remain a challenge resulting in price pressures. Apart from the cooling segments, the other durable players have been witnessing decent growth rates especially in the B2B segment, indicating a positive sentiment. A good monsoon could result in healthy rural demand and that combined with lowering inflation could translate to revival of rural demand for mass market durables," said Pallab Roy, partner, Business Consulting, KPMG in India.

Weather patterns will continue to dominate growth patterns for cooling product players. "Overall, we could expect flat growth on account of volumes being stagnant for Q1, but gradually picking up and delivering healthy growth with the upcoming festival season. However, competitive intensity and pricing will be key elements to watch out for," Roy explained.

While the overall consumer demand for small appliances has been robust, unseasonal weather in Q1 Impacted the demand for summer-centric products. "The unseasonal rains pose significant challenges for various industries and can influence consumer demand patterns. Cooling products such as air conditioners, fans and coolers, might be particularly impacted as consumers might delay or reconsider purchases until the weather stabilizes. Consequently, manufacturers may face fluctuations in production schedules and inventories for such items," said Gulbahar Taurani, MD & CEO, Versuni India Home Solutions (formerly known as Philips Domestic Appliances).

However, Versuni with its careful planning, adaptability and a consumer-centric approach, are striving to minimize the impact. "We are committed to delivering best-in-class product offerings and fulfilling the needs of our valued consumers. Customers are showing a sustained interest in upgrading their homes and embracing modern lifestyles. They are keen on improving their standard of living and leading a comfortable life by investing in appliances that make their daily house chores simpler and convenient," added the CEO of Versuni.

Reflecting a similar market sentiment, Bajaj Electricals, reported a 13.6 per cent decline in first-quarter profit, dragged by intermittent unseasonal rains and inflationary pressure.

The upcoming festive season looks promising and brands are anticipating positive sentiment continuing into the second quarter and are ready to serve its consumers. "People are gradually shifting towards their pre-covid lifestyle. Additionally, we are looking forward to the festive season and we will be launching an exciting mix of offers across platforms and touch points, along with some newly launched appliances," the CEO added.

The demand for a wide range of consumer durable goods is growing as a result of the ongoing increase in disposable income and technological innovation in India. Going forward, while general trade will remain the biggest channel of play, online channels including D2C will continue to see exponential growth on the back of a digital-enabled trade channel. "Connected devices will further expand the scope and growth of the market. The future outlook involves brands to start focusing more on projecting the intangible assets such as goodwill, ethics, purpose rather than just basic benefits and features," said Pallab Roy of KPMG, India.

By 2025, India's Consumer Electronics and Appliances Industry is predicted to be the fifth-largest in the world and the Indian Appliances and Consumer Electronics (ACE) market is predicted to nearly double in the next three years, reaching approximately US$ 17.93 billion INR. 1.48 lakh crore) by 2025, said a report by Indian Brand Equity Foundation.