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Indicators Of A Resurgent Summer
Cooling categories witness over 20 per cent value growth with the premium segments consistently contributing to the numbers
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Even though summer threw a bit of a rollercoaster pattern due to the unseasonal rains, many believe this to be a short phenomenon, as temperatures are increasing and heatwave alerts are being issued in several regions. For some companies, the sweltering weather means a good year.
“Air conditioner sales have picked up substantially. We witnessed around 80 per cent growth in our AC category this season in comparison to the same period last year,” informs Kamal Nandi, the Business Head and Executive Vice President of Godrej Appliances.
The Godrej & Boyce company head cites several markers to indicate that the cooling categories are doing well overall. He explains, “The categories have witnessed more than 20 per cent value growth. In continuation with last year’s trend, premium segments are growing. Notably, the consumption of five-star-rated ACs is rising across segments. The frost-free segment within refrigerators continues to show growth as well although the mass end is yet to pick up. Another cooling category, deep freezers, is growing very well at close to 40 per cent too.”
Continuing the Good Run
With easy access to finance and consumers seeking new relevant technologies and unique propositions, there is an boost in demand for product innovations. Nandi believes that these trends will contribute to the categories’ numbers. For Godrej, products such as the anti-leak split ACs or the new range of dark edition refrigerators are playing a key role in driving conversion.
“We continue to see higher traction and growth for premium and hence our launches are largely focusing on these segments,” Nandi says.
This year has also seen some aggressive pricing strategies for market share. The high-value inventory is getting liquidated. “Inventory-linked discounts are not expected but given the high competition in the category and the seasonality, aggressive pricing strategies are an unfortunate truth in the industry,” notes Nandi, adding, “The high material cost is also a concern and the regulatory norms imply continual investment in technology.”
He suggests the best way to grow is optimal pricing and focusing on offering relevant propositions for which consumer is willing to pay.
Engaging the Consumer
As summer heat picks up, the company is spending more on multiplatform marketing including on-ground, TV and digital. “For categories such as ACs, the secondaries peak when the nights become hot but the search process starts even earlier, which is why digital spends were deployed first across a wide variety of digital vehicles. Ecommerce is another important vehicle for promotions,” says Nandi.
Godrej is also focusing on premium frost-free refrigerators with targeted digital campaigns apart from marketing efforts on other cooling categories. “It is early to share outcomes but the surge in demand is a good indicator towards a resurgent summer,” Nandi sums up.