Post-festive blues: High-end smartphone sales underperform, says report

A few distributors indicated that as Durga Pooja and Diwali were celebrated in one month (last year, Diwali was in mid-November), it impacted demand momentum from salaried people. Distributors also indicated that festive season demand was restricted to a fewer number of days (5-6) this year, as per a report by Motilal Oswal.

Among major categories, Room Air Conditioner (RAC) saw higher growth across regions (except in Mumbai where refrigerators saw better growth), followed by refrigerators. Televisions saw demand growth of around 5-10% across regions, and few distributors indicated that sales of higher-priced items like OLED were lower than QNED. Washing machine saw muted growth across regions, except in Bihar, where growth is estimated to be 12-13% YoY, the report revealed.

Some distributors indicated that few brands will start primary sales for RAC in Dec’24, though a major inventory build-up will happen in 4QFY25. The summer season in few states start from mid-March and demand in the upcoming season needs to be watched for, considering a higher base.

RAC sales

Sales Impact: Recent rains in September and October 2024 negatively impacted air conditioner (AC) sales.

Market Share: Lloyd is gaining market share and aims for 18-19%. Voltas leads with 21-22%, followed by Daikin (20-21%) and Blue Star (13-14%).

Retail Margins: Lloyd offers higher retail margins (13-14%) compared to Voltas (8-9%).

Channel Strategy: Daikin provides better pricing for MT channels, while GTM channels struggle to compete with larger stores.

Regional Performance:

Bihar: Voltas and Lloyd performed well, but Samsung faced supply issues for 1-ton and 2-ton ACs.

West Bengal: Inventory constraints for ACs are prevalent, with brands like Hitachi, Daikin, Voltas, and Lloyd expected to increase inventory in December 2024. Lloyd is anticipated to raise prices in the upcoming season.

Telangana: AC sales were robust, with overall growth estimated at around 40% YoY from January to October 2024. Daikin gained market share through new product launches.

Washing Machine Sales:

Demand: Demand for washing machines was largely flat YoY.

Market Share: LG and Samsung lead with 24-25% market share each.

Whirlpool has 22-23% market share.

Godrej is strong in semi-automatic WMs.

Product Trends:

Front-load WMs account for only 20% of the market, with top-load dominating.

9-10kg capacity WMs are popular, especially in Bihar. Fully automatic WMs are gaining traction, particularly in Bihar.

Regional Insights:

Mumbai: Samsung's market share declined due to plant strikes.

Bihar: Strong demand for 9-10kg WMs, with a shift towards fully automatic models. Voltas Beko is gaining traction with competitive pricing and higher retailer margins.

West Bengal and Telangana: Flat YoY sales, with Whirlpool and LG leading market share.

Refrigerator Sales:

Market Share: Whirlpool leads in direct-cool refrigerators, especially in the 235-242-liter segment.

LG and Samsung dominate the CBU (400+ liters) segment.

LG and Samsung have a combined market share of 45-48%, followed by Whirlpool (20-22%).

Product Trends:

Direct-cool refrigerators remain popular, especially in Bihar and rural areas.

CBU refrigerators are gaining traction due to reduced prices.

Regional Insights:

Mumbai: Whirlpool's Athena Steel model is a strong seller. LG and Samsung's local manufacturing has reduced prices for side-by-side models.

Bihar: Strong demand for CBU refrigerators, with LG, Samsung, and Whirlpool leading the market.

West Bengal: Samsung's plant strike had limited impact. Whirlpool is strong in direct-cool and entry-level frost-free segments.

Telangana: LG and Samsung outperformed Whirlpool, with overall refrigerator sales growing 15% YoY.

Television and Mobile Sales:

Televisions:

High-end OLED TV sales were slower than expected, with more focus on QNED models.

Panel sales were weak in Bihar. West Bengal saw growth in premium TV segments, while mass segment demand was weak.

Mobile:

Lower growth in mobile sales, especially for high-end models like the iPhone 16 and Samsung's new foldable phones.

Fans:

Sales picked up in September-October 2024, with a 10% YoY growth. Premium and decorative fans are gaining popularity. Crompton and Havells are leading the fan market.

Overall Market Trends:

Increased discounts and shorter credit periods were offered due to slower sales in some regions. Local manufacturing has led to price reductions for various products, including iPhones, TVs, and ACs.