The nationwide lockdown due to the COVID-19 pandemic highlighted a clear demand for need-based products as consumers wanted to ease their daily lives in the new normal. And with the second wave of pandemic hitting several cities, people are already looking for white goods that help with the burden of household chores. Home-grown brand Voltas that sells dishwashers, refrigerators, washing machines amongst others under its Beko vertical witnessed an uptake in home appliances over the last year.
"Our Voltas Beko range of appliances have witnessed over a 100% growth over last year. We also witnessed a good pickup in demand for newer categories like dishwashers and air purifiers, which we expect will continue to gain popularity as the market penetration is currently low, and there is a lot of room to grow," says Pradeep Bakshi, MD and CEO, Voltas Limited.
Raw material shortage due to pandemic
During last year's summer, when the pandemic struck the country, there was an expected shortage and delay of raw material. This had led to a price hike for most of the companies. Additionally, the customs duties of some of the components had also gone up. Collaboratively both things together had some impact on the increase in pricing. Overall the market price increased 3 to 5 per cent for the end customers.
"Even after the recent increase in prices of raw materials have translated into price hikes for a variety of white goods, we are optimistic about the consumer sentiments, due to pent-up demand and a buoyant summer. Having said this, to make our products easily available and affordable for our consumers, we are extending several finance and cashback offers, credit card finance, extended warranty and other consumer offers," adds Bakshi.
The pent-up demand from lockdown days is still there, and Voltas expect the demand for white goods to remain high.
Cooling products in demand
Voltas expect this demand to be high in the coming few months as well, owing to an increased need for automation of household chores due to the continued work-from-home culture. Also, with the India Meteorological Department (IMD) predicting warmer summer than usual in most regions of India the company expects demand for cooling products to be higher. While the northern states have always been a huge market for Voltas air conditioner business, Southern and Western states are catching up steadily this year.
"In this summer season, we expect more traction in urban and mini-metros, due to the high level of penetration of branded home appliances in these markets. To address this growing demand, we have taken some key steps like shifting stocking focus to high demand goods, penetration in more rural, less affected zones and increasing the manufacturing capacities. As the pace of electrification increases and the expected trickle-down effect on consumer durables is likely to be witnessed, given the increasing disposable incomes, demand from rural as well as Tier 2&3 cities will increase," says Bakshi.
While the lockdown has impacted sales of consumer durables, Voltas claims to have maintained its leadership in room air conditioners with a 26% market share. "The Cooling Products business made good recovery, post easing of the lockdown situation. As of last quarter, we achieved a growth of 46% over the corresponding quarter (non-covid period) of the previous year," adds Bakshi.
The factors that attributed to this growth were management's focussed approach on product innovation, the introduction of new models, expansion of sales team and distribution network, and investments towards brand building. Voltas has also adopted an omnichannel sales and distribution strategy with equal emphasis on online as well as offline channels. This largely helped the company customise its approach to suit the different markets in the rural as well as urban areas across the country.
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