Sale of brown goods gets Diwali boost

Hyderabad: For retailers and wholesalers of consumer durables including electronic goods in the city and across the two Telugu states, the festive season has brought in unprecedented cheers this time around as customers are flocking to their stores to lap up new television sets, refrigerators, air-conditioners and what not.

Steep discounts up to 60 per cent and easy finance options offered by the retailers and showrooms are also attracting customers in hordes as Diwali, the festival of lights, gets closer. Conservative estimates put sales growth this year in this space at upwards of 20 per cent compared to last year’s festive demand.

The sales growth is happening even though prices of consumer durables including electronics goods have gone up due to GST rollout. One reason for that is piled-up inventory post demonetisation and ahead of the implementation of the new indirect tax regime. “In a bid to cash in on renewed buoyancy this festive season, retailers of electronic goods have been offering huge discounts ranging from 25 per cent to 60 per cent as against normal practice of 10-15 per cent.

Retailers and wholesalers in Telangana and AP are offering attractive discounts to clear old inventories that blocked their investment,” an industry insider said. Several consumer durables including refrigerators, air-conditioners, television sets and washing machines are available at attractive prices, bringing cheer to consumers, Consumer electronic giants such as Samsung, LG, Hitachi, Panasonic, Videocon offer heavy discounts to offload their inventories and enhance the top line this Diwali season.

“I thought of buying a smart television set two months ago. It was priced upwards of Rs 60,000 then. I postponed my decision to purchase it. I am getting the same product at a good discount now thanks to the festive offers,” Venkateshwara Rao, a resident of Dilsukhnagar, told The Hans India, at a showroom.

Retailers said consumers, who were wary of buying high value consumer durables fearing note ban impact and GST roll out, were returning to retail market during the festive season.

Majority of retailers have been suffering from piling up of stocks ever since demonetisation announced on November 9, 2016, and sales were further turned sluggish because of GST, which came into force from July 1 this year.

Comparing to the situation a year ago, now, sales have improved much, observed an owner of a leading consumer electronics goods at Malakpet.

“The adverse impact of cash crunch and GST uncertainty is gradually waning off. We’re happy to see that consumers are back to retail market. Of course, we’re offering huge discounts we never offered earlier,” he said.

India Brand Equity Foundation estimates the size of domestic consumer durables and mobiles segment retail at $12.5 billion. Telangana and AP account for 8-10 percent of this segment, according to rough estimates by local wholesalers.

However, the situation is not same with the small vendors, who sell toys, fancy sparkling lights, etc. Every year, we had good demand for toys, fancy lights, gift items, plastic ware and decorative goods. But, this time, the momentum yet to pick up.

“We’re buying from dealers to complete just existing orders, as they want to avoid stocking up huge orders in the run-up to the start of GST regime,” said an owner of a plastic toys shop.

Interestingly, the recent Doklam episode with China is also showing impact on consumer buying pattern. The demand for Chinese products has declined considerably.

“Buyers are particularly asking whether it’s a China made. Over 70 percent of consumers are inclined to buy Chinese products including decorative items and sparkling bulbs,” said Himayath Khan, who runs a small shop at Isamia Bazar.

Industry body Assocham in its latest report made a forecast of drop in sales of Chinese goods in the domestic market. Sales of Chinese products may decline by over 40 percent this Diwali as decorative items, gifts, lamps, wall hangings or other products would be affected drastically, said Assocham.