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Electronics companies run into entry-level pileup



Kolkata: Stagnant or lower festive season sales of entry-level television and appliances like semi-automatic washing machines and single door refrigerators have seen a huge pile-up of stock of these products prompting consumer electronics companies to cut production by up to 30% in November and December, three senior industry executives said. Low to middle-income consumers stayed away from purchases or shifted to hugely discounted online-focused brands.While premium products like large screen televisions, frostfree refrigerators and fully automatic washing machines did sell in cities and large towns driven by plethora of consumer finance options and price cuts — sales of entry-level products which constitute the belly of the market — were a washout, several manufacturers said.Two industry executives said Samsung is evaluating curtailing of television imports (it does not have local production) in the next two months, especially of entry level screen sizes smaller than 43 inches. Sony and LG are also considering similar options for TV production. Some brands have also told contract manufacturers about reducing production for appliances and TV.”Television sets, semi-automatic washing machines and single door refrigerator sales were badly impacted this Diwali with inventory piling up, especially in up-country markets. Companies are reducing their production since November-December are lean months,” said industry body Consumer Electronics and Appliances Manufacturers Association president Kamal Nandi.In a rare move, Samsung and LG have extended consumer promotion schemes for televisions beyond Diwali till November. Overall television sales remained flat through the year and failed to revive during festive season, as consumers postponed purchases by consuming streaming content on smartphones owing to poor economic sentiment.71929636

Growth in 55-inches and above premium models failed to revive the overall TV market due to 30% contribution by unit sales. In the sub-50 inches range, online-focussed brands like Xiaomi, BPL, Thomson, Kodak and Vu dofaiminated sales this Diwali.Nandi, who is also business head at Godrej Appliances, estimates sales of semi-automatic washing machine and single door refrigerators declined 7-10% this festive season compared to last. Samsung India denied plans of import cut and extension of consumer promotion scheme. In a press release on Tuesday, Samsung said it grew sales of its premium TV line up this festive season — sales of QLED television went up three times over last year and doubled for 4K TVs, while it has launched offer for Gurpurab and wedding season.Sony declined to comment for this story. LG India did not comment on television production cut but vice president (home appliances) Vijay Babu said there were no plans to cut production for appliances, with appliance sales growing 35% this festive season across both entry and high-capacity models. CM Singh, CEO at electronics retail chain CMS Electronics Junction, said manufacturers have indicated cut down on production and imports. “The impact in entry level products was everywhere, but in smaller towns, festive business was down 30-40% over last year. Ecommerce further dented sales,” he said. Retailers said Diwali discount is continuing for entry level appliances and televisions in November as well. East and North’s leading retail chain Great Eastern director Pulkit Baid said most brands have decided to continue festive schemes, freebies and extended warranty, especially for TVs, to liquidate stock amidst slow sales last month.Nandi said premium appliances grew, helping the industry clock 6-7% growth, but those are not barometers of the economy. “There is a liquidity issue in trade and this has impacted wholesale stock movement, which remained down 5-10% (on-year) from July onwards,” he said.The festive season — from Onam in Kerala till Diwali covering Navratri, Durga Puja, Dussehra and Dhanteras — is the biggest shopping period in India, accounting for 30-40% of annual sales of consumer electronics, smartphones and home appliances.



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