Colour TV category growth trails other consumer durables in 2004: ORG-GfK durable audit

In the consumer durables category, the Colour TV (CTV) segment has witnessed the lowest volume (9 per cent) and value (1.4 per cent) growth in 2004/03 as compared to refrigerators (volume growth of 6.4 per cent; value growth of 3.1 per cent); washing machines (11 per cent in volume; 9.9 per cent in value); Microwaves (58.3 per cent; and 37.3 per cent); Convection (65.4 per cent; 49.4 per cent); Hi-fi Music Systems (50.8 per cent; 50.7 per cent) and Minis (51.4 per cent; 45.6 per cent). The redeeming aspect is that CTVs’ value growth in 2004/03 (1.4 per cent) was better than the 0.1 per cent growth in 2003/02; similarly refrigerator category growth rose from –1.9 per cent in 2003/02 to 3.1 per cent in 2004/03.

These are the topline findings of the recently released ORG-GfK (a JV between AC Nielsen ORG-MARG and GfK Asia Pvt. Ltd.) Durable Retail Audit Review. The Review illumines trends in 2004.

The ORG-GfK Durable Retail Audit review points out that the consumer durable industry grew by 6 per cent in 2004. India is the only market witnessing 9 per cent unit growth in CTVs (Flat TVs shot up by 125 per cent in volume and 96 per cent in value) and a 30-40 per cent surge in mobile phone handsets. The demand for high-end and lifestyle products, such as DVD players, camcorders, digital cameras, and mobile camera phones too have seen an upswing. Simultaneously, value-for-money products boosted by sustained consumer and dealer schemes within smaller markets are likely to be carried forward, fuelling growth in the current year.

Bhuwan Singh, Associate Director, ORG-Gfk, points out, “Growing affluence across demographic groups, easier credit financing and the sheer explosion in a variety of product offerings have created a propulsion for offtake. Durable marketers have addressed the two key issues of affordability and availability with heightened focus. Marketers are trying to segment buyers in metros carefully and this has led to a proliferation of options at the premium end of the market. Com-bined with relatively low penetration and a gradually inverting income pyramid, this provides the growth thrust that the durables market is likely to experience.”

Tech-adoption: 2004 catchphrase Growth has occurred more noticeably in premium categories like flat panel TVs, frost-free refrigerators and fully automatic washing machines. There appears to be a discernible shift in consumer preference towards technologically upgraded variants within existing product categories. The move from round screens to flat screens in CTVs; from direct-cool to frost-free in refrigerators; and towards fully-automatic machines are telling indicators. Flat TVs, frost-free refrigerators and fully automatic washing machines contribute to 25 per cent of volume sales.

Price rationalisation This has been accelerated by a wide-ranging price rationalisation across categories within durable retail showrooms. Though pervasive, the sharp drop in price points appears to have been arrested towards the end of 2004, led primarily by an increase in the input costs of household appliances. The market’s largest contributor, CTV, is battling the continuous demand for better innovation, pricing and advertising. Also volume growth in ‘04 offset its dire consequences.

Across key categories, down trading to lower price points within higher-end categories has resulted in average prices reaching their lowest point over the last three years. Across the key categories, price reductions within products like frost-free refrigerators, flat screen TVs and fully-automatic washing machines, which grew the fastest, has shored up volume sales.

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