Ad spends of consumer durables to surpass pre-Covid levels in festive season, category expects double-digit growth

Even though the Covid-19 pandemic has wiped away peak summer sales of the consumer durables industry in the last two years, especially for those selling air-conditioners and refrigerators, the companies have high hopes from this year’s festive season.

While categories such as mattresses, electronics and air purifiers will have the maximum demand, brands are expecting demand for replacement and upgrade to be high too, since there was a gap in consumption during the second phase of lockdowns.

Swati Rathi

With Q1 this year disrupted by the second Covid wave, there is a good chance that consumption will increase in Q2 and Q3 as a result of pent-up demand, said Swati Rathi, Head, Marketing, Godrej Appliances.

The brand is already seeing a positive trend in consumer demand this month. She anticipates consumer durables to see a strong demand in the coming months with the onset of the festive season.

“The festive season usually contributes 30% of our annual sales. We are seeing encouraging signs of demand revival and by the festive season, we should be closer to the pre-Covid levels as vaccination numbers go up across the country. We are targeting a double-digit growth rate of 20% plus during the festive season,” she said.

Deba Ghoshal

Even though there has been a significant change in the consumer’s decision-making journey in the recent past, Deba Ghoshal, Vice-President and Head of Marketing, Voltas, said the white goods industry is witnessing a slow yet steady return towards normalcy.

As consumers opt for appliances to ease their daily chores while managing their work-from-home life in the new normal, there has been a clear rise in the demand for need-based functional products. 

“We are expecting the replacement and upgrade demand to be high. The industry has noticed a phase-wise revival of different categories such as air-conditioners and refrigerators during the extended summer, and with the onset of monsoon, we are witnessing traction for washing machines. In the festival season, we expect new categories such as dishwashers and air-purifiers to gain momentum. We are optimistic that in the upcoming festival season, in case we do not witness another lockdown, all categories will start gaining the lost ground, and make up for the muted consumer sentiment witnessed in the earlier quarter,” he said.

With the festive season almost set to begin, consumers are looking forward to a more optimistic second half of 2021.

Sooraj Balakrishnan

Although the pandemic has been a major disruptor of businesses, Sooraj Balakrishnan, Head of Marketing, Acer India, said the consumer personal computer (PC) space witnessed a good momentum. “Indian consumers have shown signs of a surge in demand and are spending again. Consumers are becoming more aware of the need for a modern PC in their homes as more things move online. PC has become truly personal and it is no longer a single device per household but rather a device for each individual in the household,” he said.

Balakrishnan expects the market to boom during the crucial shopping period, surpassing last year’s record sales, as consumer sentiment improves with a larger population getting vaccinated completely.

“We anticipate the festive season to perform fairly, with enhanced consumer sentiments and macro-economic conditions. We see sales picking up in smaller cities due to reverse migration of people from bigger cities due to WFH as they spend and purchase for festivals from their hometowns. This has made the economy more distributed and as retail has opened in most of the cities in India and the festive season looks promising for the category,” he said.

Considering the pandemic and the lockdowns, brands said people were spending conservatively in the space of consumer durables. They were looking for an opportunity such as the festive season to get a good deal for products they wanted to purchase.

Mathew Joseph

Mathew Joseph, Co-founder, Sleepyhead, said one can expect good sales for mattresses and furniture this year.

Sleepyhead is looking at 3x-4x growth this season. He said the category expects around 30-35% growth in the online space.

Adex to surpass pre-Covid levels; OOH to make a comeback

The consumer durable industry is highly seasonal and with summer sales severely impacted, spends have also been adversely affected. Amid the anticipation of a strong festive demand, companies are expected to up their spending.

Rathi said there is an upward trend on digital spends for the industry as a whole. Given some large-impact properties on TV during the festive season, one can also hazard a guess that TV spends will see a greater uptick than other formats of traditional media.

“Overall, the industry will be in readiness to spend – perhaps even on a par with pre-Covid levels, but the final decision will depend on how the market behaves and the footfalls on ground. Compared to the last festive season, adex spends can definitely be expected to be higher,” she added.

During the last two years, the Covid waves arrived just before the advent of summer, and hence Voltas had to pull back its investments (for cooling products) in the interest of the business.

Ghoshal said the festival period remains active for the home appliances category and it will continue to leverage the consumer sentiments during that period.

“Keeping in mind the cautious approach towards high-ticket investments, we feel the overall adex will be on a par with last year,” he said.

For consumer durables, especially cooling products and home appliances, just like last year, digital will be the priority, followed by electronic media.

“Our category will use print tactically for localised promotions. Two years ago, digital used to be around 10% of our overall media investment; today it has reached 25%. We will also continue to drive our omni-channel presence within the category by leveraging digital and activations. Within digital, our thrust on reach, social, programmatic and e-commerce will continue this year. In case the situation remains optimistic, we will have to go back to electronic media with a skew towards news, sports and GEC,” he said.

With an endeavour to increase access to all its products, the brand has introduced multiple finance offers to spike consumer interest at a pan-India level.

Due to IPL and the festive season, adex will grow in mass media such as TV and newspapers again while continuing their momentum on digital and other new-age platforms, Balakrishnan said.

In the PC category, he said the adex expenditure will reach pre-Covid levels soon as long as we don’t face further disruptions.

“Compared to last year, I feel the industry is on track to do better this year, especially with big-ticket events such as Euros, Olympics, IPL (happening in two phases) and the big festive season around the corner,” he said. 

Acer is stepping up its spends for the festive season with an integrated approach with TV, digital, OOH, retail, e-tail, WoM at scale—co-marketing with its large retail and e-tail partners, etc., backed with great offers.

As a category, about 35% of the marketing funds are reserved for the festive season, Joseph said. During the festive months, Sleepyhead spends 1.5 or 1.7 times more as compared to non-festive months and is now spending more than pre-Covid levels.

“The mattress and furniture category’s ad expenditure will definitely reach pre-Covid levels as brands are looking to recuperate from the lockdown. The general sentiment in the market is a bumper sale this festive season and hence they would have earmarked budgets for the same,” he said.

Its marketing strategy is to reach the customers at all the touchpoints of the purchase journey. It will collaborate with micro- and macro-influencers who would seamlessly integrate its products in their content.

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