homeeconomy NewsIndustry experts say demand for consumer durables largely lukewarm in Q1 despite hopes of rebound
Industry experts say demand for consumer durables largely lukewarm in Q1 despite hopes of rebound
While the consumer durables sector experienced a tepid performance in the first quarter, industry experts remain cautiously optimistic about the future. The gradual improvement in rural demand and the upcoming festive season provide some hope for a resurgence in the market. However, challenges, such as the impact of seasonal fluctuations, still need to be addressed for sustained growth in the consumer durables industry.
Quarter four results showed that COVID related declines and spurts are behind. The electronic consumer durables ndustry grew at a 3-year compounded annual growth rate (CAGR) of 12 percent from FY20 to FY23, which is close to the pre-COVID pace. Cables grew by 17 percent, much better – that is the 3-year CAGR and air-conditioners grew by a more tepid 10 percent.
While these numbers look good, the gross domestic product (GDP) data for quarter four showed that consumption for the country as a whole grew by only 2.8 percent.
Quarter one is coming to an end in 10 days and it is a good time to check – firstly, if the long-awaited rural demand arrived in style in quarter one and secondly, how will the upcoming festival season shape up? Has stocking for quarter two already begun and if it has, what are the early signs?
Demand for consumer durables in the first quarter of the year has been largely lackluster, according to industry experts. Despite the hopes of a rebound after a challenging year, the consumer durables sector has experienced a slow start to the year.
TT Jagannathan, Chairman of TTK Prestige, shared his insights on the current state of the industry during an interview with CNBC-TV18. He stated that the first quarter was similar to the previous quarter and highlighted the gradual improvement in rural demand. Jagannathan expressed optimism for a healthy second half of the fiscal year 2023-2024, with expectations of stocking to commence in the second quarter.
“Quarter one was similar to quarter four. I won’t say it was any better than quarter four and rural demand is looking good,” he said.
Another industry expert, Atul Lall, Managing Director of Dixon Technologies, mentioned that the consumer durables market is currently in the midst of the festive period, which usually sees a surge in demand. He expressed optimism about receiving a healthy forecast for appliances during this period.
“Rural demand is looking to be better. However, we are just around the festive period. We are getting a pretty healthy forecast for the television business, for a washing machine business and one product category which is doing very well is wearables,” he said.
Anuj Poddar, Managing Director and CEO of Bajaj Electricals, stated that he is starting to observe an uptick in rural demand.
“We are starting to see some pickup in the rural demand and it is slightly outpacing urban as the trends that we are seeing in the last couple of months,” he said.
Akshay D'Souza from Bizom highlighted the impact of the months of April and May on the industry. He explained that these months heavily rely on the sale of summer products, which have taken a hit due to various factors affecting demand.
“April and May have taken a hit and June is trending positively compared to last year,” he mentioned.
(Edited by : C H Unnikrishnan)
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