Consumer Durables And Their Role In Our Life In Uncertain Times
They say necessity is the mother of invention. The current crisis has proven to be that, pushing to newer ways to lead our lives. The infectiousness of Coronavirus isn't a `normal' one, and has disrupted businesses, communication, and operations like never before. Consumers saw this fundamental shift in behavior driven by safety, privacy, and hyper-localization.
When social distancing and virtual collaboration be-came the Normal approach to everything, whether it is working or school kids taking sessions, or everything otherwise went completely digital. Work from home and life without domestic help have pushed the average Indian consumer to indulge in upgrades in their consumer durables and appliances, as the home became their entire world. With no travel, no social engagements and other recreational activities, technology became the new solution to facilitate the working from home regime.
Consumer retail remains the backbone of consumer demand, where home-based items and products have taken first priority as people spend their maximum time at home
A survey by EY titled `Life in a Pandemic', indicated how 94.5 per cent Indians had accepted work from home as the new normal, 80 per cent of students had shifted to online education and 46 per cent remained open to continue learning from home. As the world learned to cope with the current scenario, the pace of digital delivery continues to increase. The biggest change is the change is the work culture as laptops and phones became our closest pals. The need to be technologically savvy has pushed for higher sales of consumer durables and electronics. Even after the lockdowns lifted, customers are stepping out less, eating home cooked meals with a focus on health and relying on new forms of cooking at home and relying on new forms of entertainment.
The durable marketers saw a good off take in the second and third quarters of the current financial year, owing to this trend of consumers being home, and therefore a higher need of home electronic items. According to the analysis done by Retailer Association of India (RAI), items related to the Work-From-Home (WFH) regime have shown increased recoveries since lockdown opened and continue to do so. Some segments in this space registered double-digit growth of about 15-18 per cent as compared to 2019 during festive seasons.
This is a clear reflection of the impact of the situation which has been how the dependence on electronics and durables has facilitated staying at home possible for every member of a family a working person, a home-maker or even a student. Not just new items, the growth of this segment in the secondhand market through online listings also saw a huge spurt, as consumers couldn't put off purchases of these items. It also highlighted the need for upgrade, as these items became indispensable. Not just driven by need, consumers also saw more time in their hands to redecorate and a section of these purchases were driven by such trends.
The work from home situation and the reluctance in hiring back domestic help in many households against the risk of coronavirus continues to push demand for home appliances like ACs, laptops, refrigerators, washing machines and microwave ovens and so on. The numbers of the festive season are testimony to that. Not just metros, the pent-up demand not just came in from metro cities but also tier II and tier III cities.
Industry analysts had expected this sector to show signs of recovery and an RAI report in July 2020 had revealed consumer durables was on road to a fast recovery in the unlock period with a degrowth of just 19 per cent, against others like apparel, furniture, even grocery which showed a degrowth of more than 40 per cent be-fore the lockdowns were lifted.
Consumer retail remains the backbone of consumer demand, where home-based items and products have taken first priority as people spend their maximum time at home. While the concerns about job losses, declining saving bubbles and purchase capacities remain, house-holds are doing fine, and the reliance on household durables has become a necessity right now. Further, digital gadgets like phones, tablets and computers constituted a large chunk of these sales, for both personal and professional use. More consumers upgraded to newer gadgets and smart TVs as consumption of OTT content surged during this period.
The success of the durables sectors is an example of the Bharat bounce back story with semi urban, and rural regions to also have driven significant growth as every-one across the country is restricted at home for most of the time. Ecommerce sales in this segment coupled with flash sales and discounts around the festive season also played a massive role providing consumers many options and make work from home or perhaps living 24x7 at home happen.
The white goods market in India, which is valued at Rs 60,000 crore, has grown at over 15 per cent every year. But COVID has been a disruption but also an opportunity as consumers continue to rely on house durables. Technology has been a key enabler during these times, and it also applies to this segment. The trend is likely to go upward, for the next year, as the effects of the crisis remain. The market outlook even post the festive season remains bright with companies expecting to clock good sales before 2020 ends.