If you think it is too early to buy an air-conditioner (AC) for next summer, you could lose out on the discounts on offer. In a bid to exhaust the inventory and make way for fresh stock, dealers will begin rolling out discounts from December 2019.
While ACs may carry a discount of up to 30 percent, other appliances like TV sets, washing machines and refrigerators may come in cheaper by 10-15 percent.
"There has been inventory pile up. Unseasonal rains in the beginning of summer proved to be a dampener for AC sales in 2019. We are trying to make way for new products for 2020 and hence brands have agreed to offer discounts," said the head of a pan-India consumer electronics retailer.
Diwali sales were also lower than expected and hence the decision to extend the discounts. While the sale during the festival were marginally higher than 2018, but the 40 percent revenue jump anticipated by appliance firms could not be achieved.
To help mitigate this situation, the quantum of discounts are expected to be higher in the offline channel than online.
During the festive season, appliance retailers had complained about e-commerce players indulging in anti-competitive practices and offering discounts which were not sustainable.
"Flash deals have affected offline retail business. Hence, we have to make up by cutting prices of appliances in stores," said head of sales at a mid-sized white goods firm.
E-commerce firms had offered mouth-watering deals for TVs during the festive season. Shinco's 55-inch television was offered for Rs 5,555 as part of an Amazon flash deal as against its original price of Rs 34,000. However, offline players are unable to offer these discounts due to store expenses as well as people costs.
When it comes to ACs, the winter season extended till March end in parts of North India. Hence, the sales of products were hit. Further, inventory has been piling up since 2018, which was another bad year due to a cooler weather.
"Considering that sale of ACs has taken a hit of at least 30-35 percent in 2019, discounts will be higher," said the head of consumer appliances at an electrical goods firm.
The discount period that will begin in December will continue till the first week of January 2020.
Among the other consumer durables, the sudden fall in TV panel prices led a crash in television prices. However, heavy rainfall and frequent cyclones in parts of the country hit sales by almost 20 percent.
Hence as the year comes to a close, TV makers are also in talks with dealers to not just offer discounts by also free accessories.
The head of televisions at a global white goods firm said that there is a tough competition among the companies to display their sales promotions prominently among electronic retailers.
"Getting prominent store space will be crucial because this determines the quantum of sales. We have already lost out despite major sporting events like the cricket World Cup being held this year. Hence discounts and dealer incentives are being rolled out," the official added.
Apart from customers, dealers fulfilling the sales targets will be presented with travel tickets, electronic goods as well as higher margins.