With the ongoing festive season, every brand is gearing up, some with exclusive festive offers while others with discounts and special vouchers, since for most brands festive season brings in a major chunk of business. It is a known fact that fast-moving consumer goods (FMCG), consumer durables, and e-commerce companies see strong sales amidst the festival season.
As the impact of the Covid-19 pandemic wanes, retailers and manufacturers of appliances such as TVs, smartphones, air-conditioners, and refrigerators are banking on this season to generate and bring in higher sales. In India, the pandemic reinforced the brands to evolve, changing and upgrading the orthodox methods of engaging with consumers.
As per Samsung, after a gap of two years, consumer footfall is rapidly increasing at brick-and-mortar stores as consumers are moving to premium, lifestyle products.
Even Aiwa post its relaunch, received letters from all over the country expressing their felicitations placing orders faster than the existing supply chain would allow amidst the pandemic since it produces premium products at good prices having Japanese lineage and Indian production.
“We have seen a great consumer response for the small appliances industry over the last few years. It has been encouraging to see consumers adapting to smarter, more efficient solutions to simplify their lives. Today, there is a sense of enthusiasm and normalcy among people as they gradually shift towards their pre-covid lifestyle," said Gulbahar Taurani, MD and CEO, Philips Domestic Appliances.
The festive sales that started on September 23 have completed their first round and are currently live with the second round across major e-commerce platforms including Amazon, Flipkart, and numerous other consumer durables brand websites.
Festive Sales-Round I
According to a Crisil report, the consumer durables sector is likely to witness a double-digit volume growth, pushing its revenue up by 15-18 percent to Rs 1 lakh crore this fiscal and with the first round of festive season sales coming to an end, it seems to be on the right path.
“The response has been overwhelming. Even though we had not advertised much and were a little wary about the awareness of our brand, the recall of Compaq and the trust in it has assured us tremendously,” said Amitabh Tiwari, CEO, Ossify Industries Pvt. Ltd.
Compaq, a brand that believes that technology must be accessible to everybody emerged as one of the top-selling affordable TV brands in the country during Flipkart’s Big Billion Days (BBD) from September 23-30, 2022.
Moreover, within the first three days of the festive sales, it recorded a 100 percent jump in sales with thousands of orders being placed within just two hours on Flipkart.
“Samsung has doubled its retail investment to enhance consumer experience during the festive season by training our retail partners and introducing a slew of new initiatives. We are all geared up for a bumper festive period and cater to the premiumization trend through various offers, cashbacks, and EMI options. We are certain that the demand for premium products will continue to remain buoyant,” said Mohandeep Singh, Senior Vice President, Consumer Electronics Business, Samsung India.
Adding to the same, Pallavi Singh Marwah, VP, Super Plastronics Pvt. Ltd (SPPL), said, “The overall customer response has been a positive one and we witnessed that consumers were willing to buy once more since the world has opened up and people are getting to enjoy festivities after over 2 years.” SPPL is a manufacturing company established in 1990, a brand licensee of 5 major global brands, Thomson, Kodak, Blaupunkt, Westinghouse, and White-Westinghouse.
Gulbahar Taurani further added, "We are anticipating that this positive sentiment will follow through in the festive season, as consumers gear up to celebrate uninhibited, this time."
What's In Demand?
It can be clearly witnessed that, in the past two fiscals, pandemic-led disruptions had impacted consumer sentiment and peak seasonal demand. This fiscal, healthy growth in urban income will be able to push the demand. The demand for Smart TVs can be witnessed across all Tiers, “we witnessed a rise in the sales of our 40-inch televisions in comparison to the 32-inch earlier,” stated Pallavi Singh.
Similarly, according to Compaq, Smart TVs especially big screens like 50-inch or 55-inch followed by 43-inch were in demand.
“We are seeing higher traction for bigger sizes in the television category. Moreover, for Audio our flagship models, MIX 450 & MIX 150 are witnessing the highest traction in the portfolio," asserted Ajay Mehta, Managing Director, Aiwa India.
Although Samsung witnessed a 2X growth in premium TVs, it also saw a growing demand for 350-liter and above refrigerators as well, along with a 3X growth in demand for its soundbars this Onam. “The demand for our flagship Neo QLED TVs has quadrupled since last year,” added Mohandeep Singh.
Maximum Growth Areas
As per Amitabh Tiwari, with e-commerce emerging as one of the biggest players it cannot be clearly determined which area exceeded the other without concrete data shared by the said platforms. However, in terms of offline business, the brand witnessed a major business spurt from North India although other regions were not far behind.
“Since the festive season is currently on with festivals in almost every corner of the country, it is hard to pin one area which witnessed a sales hike. We have witnessed an overall increase in sales, depending upon the festivities,” added Pallavi Singh.
However, SPPL witnessed an increase in sales from South India during Amazon’s Great Indian Festival.
As per Aiwa India, the Premium and Mass Premium segment in metro cities presented stronger growth than the mass market segments.
“We are seeing some great consumer offers and finance schemes that make products in this segment more affordable, contributing to two-thirds of Aiwa sales. With increasing disposable incomes this remains to be the most coveted segment for brands,” commented Mehta.
Today TVs are becoming an essential commodity rather than a luxury good, with Smart TVs and bigger screens taking up major spaces in households, the demand and sales for the same are increasing across the country.
“Two very distinct trends that have become clear during the festive sales were, one, that the days of non-smart TVs are over and in smart TVs, the movement of the bigger screen is growing by the day; gone are the days when 32-inch TVs formed the backbone of volume,” stated Amitab Tiwari.
SPPL’s VP, Pallavi Singh Marwah also vouches to witness a shift, as the acceptance rate of Smart TVs and bigger screens increase even in Tier III cities, as well as rural areas especially post introduction of 5G in India.
“Overall, we see a smartening Indian consumer and cash-rich middle class who want to spend on themselves, which is why distributors prefer Japanese brands over Chinese which is why we are confident about Aiwa’s prospects,” commented Ajay Mehta.
Mohandeep Singh further concluded by saying, “At the back of Samsung’s achievements, with the festive fervor currently at its peak, we expect our overall consumer electronics business to grow by 45 percent and premium segment to grow by 80 percent.”
Moreover, Taurani shared, "We are ready with an exciting mix of offers across platforms and touchpoints, along with some newly launched appliances which will help consumers turn their houses into homes. This festive season looks promising, and we are optimistic about the demand going up."
In short, it can be clearly noticed that this festive season, the consumer durables segment will witness much higher growth in comparison to the last two pandemic struck years.
New technological advancements and the growth of the digital space have led various sectors to embrace innovation and adaptation. The fast-moving consumer goods (FMCG) sector, in particular, has rapidly shifted in that direction by joining hands with the e-commerce industry. McKinsey reveals that e-commerce sales in the consumer goods industry are projected to reach $1.8 trillion by 2025, a fourfold increase from the last decade. In the face of intense competition and a high turnover volume in the sector, Artificial Intelligence emerges as a crucial differentiator in helping brands stay ahead of the curve.
Artificial Intelligence plays a vital role in bringing consumers closer to the brand. An ongoing challenge within the FMCG industry is for accurate consumer insights to enhance data-backed decision-making. Insights AI combines advanced AI technologies like Emotion AI, Behavior AI, and Generative AI, to ensure brands get in-depth consumer behavior data. These technologies help brands understand the expectations and preferences of target audiences and provide accurate data for efficient decision-making.
As with any other industry, consumer needs and expectations in the FMCG sector are ever-evolving. AI's ability to access and process vast data sets allows brands to tailor their marketing strategies quickly and effectively in line with the requirements of the target audience. With the inclusion of Insights AI, the Indian FMCG industry could witness a significant improvement in the cost and quality of products and services.
One of the most crucial aspects of any FMCG product lies in its ability to resonate with the consumer. Here is where understanding the emotions and behaviors of the consumer towards the product becomes important. Insights AI plays a vital role in bringing these insights closer to the brand in several ways.
Insights AI can create exceptional value for the FMCG brands thriving in e-commerce. 29.1 percent of consumers believe that AI can be better utilized in providing personalized product recommendations, while 33 percent agree on its function to provide optimized search results. It can decode an individual’s purchase history and demographic information to create personalized shopping experiences for its consumers.
As one of the industries undergoing a major change due to Insights AI technologies, let us look at some of the ways it is creating a difference today.
1) Consumer Research: Insights AI can gather data and feedback on the path to consumers' purchase journeys- from looking at a product ad to completing a purchase on a website. It helps provide deep, unbiased insights, which ultimately provide a seamless shopping experience.
2) Marketing Communications: FMCG can benefit immensely in creating targeted and personalized campaigns that truly resonate with their target audience by understanding what consumers like and dislike.
3) Content and Media Testing: Brands can optimize the visual appeal and engagement across various content formats, such as ads, videos, social media posts, etc., by testing content and media pre and post-launch.
4) Pack Design and Shelf Placement Testing: FMCG brands can test their pack designs and shelf placements using Insights AI, which analyzes the shopper’s purchase intent, stopping, holding, and closing powers to make products stand out.
5) New Product Development: Validate your concepts, opinions, and ideas before a new product is developed to ensure that you are not completely relying on your gut instinct and guesswork.
While AI has a huge potential for FMCG brands to scale and improve, its widespread adoption also raises concerns about data privacy and ethical considerations. The heavy reliance on consumer data for insights also means transparency is a key priority in AI.
AI-led disruption in the FMCG sector is not just a possibility- it is already happening. From optimizing strategies to personalized recommendations, AI is leading the way for the FMCG sector to thrive- in the e-commerce space and beyond. With the continuous evolution of technology and fierce competition in the market, the need for products and brands to stand out is imperative, especially among FMCG players. As such, brands must remain agile, adaptive, and customer-centric in their approach toward AI to deliver meaningful experiences for the end consumers.
Ranjan Kumar is the Founder and CEO of Entropik – research integrated platform powered by AI. He is an engineer from IIT Kharagpur, has invested most of his time working with soft computing, neural computing, and deep learning. Ranjan has worked with distinctive firms like ONGC Ltd and ITC Ltd, after which he turned an entrepreneur with Oyeparty.com in 2012. He has also headed business at Citrus Payments, a fintech company, giving the division exponential growth under his leadership.
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