Cooling appliances see double-digit growth
Chennai: Heat wave has blown up the demand for cooling appliances, leading to a healthy double-digit growth in their sales this summer.
The refrigerator and air-conditioner market is growing at 20 per cent, led by the scorching summer, pent-up demand and broad-based off-take, finds HDFC Securities.
According to Kamal Nandi, President, Consumer Electronics and Appliances Manufacturers Association, sales of refrigerators have grown by 12 to 15 per cent in volume terms and air-conditioners by 18 to 20 per cent. “The demand was good in the south during March and the first half of April. North and East picked up during the second half of April and May. Overall, the demand was good after three years,’ he said.
B Thiagarajan, Joint Managing Director of Bluestar, finds that the low base also has supported the double-digit growth. “After demonetisation and introduction of GST, last summer was bad for cooling appliances. From the base of 5 to 6 per cent decline last year, this time we have seen around 20 per cent growth,’ he said.
According to Naval Seth of Emkay Global, improved demand was backed by price increases in refrigerators. “Uncertainty around demand and focus on inventory liquidation of last year had deferred price hikes, but with strong demand uptick, brands have taken selective price hikes though prices will still be lower than last year due to sustained competitive intensity,’ he said.
Nandi finds that companies have taken a three per cent hike in the price of refrigerators from the December-March levels. However, after the GST reduction to 18 per cent, refrigerator prices are still 4 to 5 per cent cheaper than last summer.
In January 2018, after the table change for fixed speed ACs and variable speed ACs, the prices of air-conditioners had gone up by 15 per cent. However, compared to last summer prices are stable. Meanwhile, several brands that have been offering discounts earlier have now taken them back on seeing the rising demand.
HDFC Securities finds that demand for low-priced products was higher this summer against last summer. Further, stabiliser growth has rebounded after two years of muted growth due to healthy refrigerator and AC off-take. Growth in fans has improved due to hotter summer and premiumisation initiatives.