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    Electronics companies plan big festive offers to revive demand

    Synopsis

    Company executives said they are increasing the spend to drive demand that slowed down this year unlike last two years when supplies were a challenge, while for smartphones it is also to clear out 4G smartphones with 5G models to prepare for the launch of 5G services next quarter.

    mobile-agencies1Agencies
    Demand for smartphones and televisions have slowed down since February and household electronic appliances from May due to record high inflation and consumers spending in other avenues like buying apparel, eating out or holiday.
    Consumers planning to buy consumer electronics and smartphones this festive season may be spoiled for choice with top brands lining up their highest spending on consumer offers, discounts and promotions to revive demand and clear inventory.

    Company executives said they are increasing the spend to drive demand that slowed down this year unlike last two years when supplies were a challenge, while for smartphones it is also to clear out 4G smartphones with 5G models to prepare for the launch of 5G services next quarter.

    Realme on Tuesday announced it will offer discounts worth Rs 700 crore for the entire festive season across channels, as compared to Rs 500 crore spent last year. Industry executives said Samsung and Xiaomi too are going to substantially increase spending over last year with cutthroat competition in the mobile phone market. Samsung and Xiaomi did not respond to emails.

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    Electronics brand Haier is going to spend Rs 100 crore this festive season on advertising and promotions, while appliance industry market leader LG India is increasing the festive spend by 20-25% over last year.

    “The festive season is extremely critical this year with the increased spending expected to spur demand,” said LG India vice president Deepak Bansal.

    Haier India president Satish NS said all efforts will be to revive sales this festive season with higher spending on consumer promotion and marketing. “We are building inventory expecting good business, like a calculated gamble,” he said.

    Companies are going all out with direct price drops; exchange offers and cash backs. Bosch and Siemens, for instance, will start an upgrade offer for consumers this year, while Realme said it will offer discounts up to Rs 10,000 on smartphones and up to Rs 12,000 on electronic products.

    Demand for smartphones and televisions have slowed down since February and household electronic appliances from May due to record high inflation and consumers spending in other avenues like buying apparel, eating out or holiday.

    The festive season – covering Navratri, Durga Puja, Dussehra and Diwali -- is the most crucial sales period for smartphones and consumer electronics manufacturers in the country accounting for 35-40% of their annual sales.

    Discounts in e-commerce channels are also likely to go up on selected models considering there is high unsold inventory, and with Reliance and Tata entering the fray this year with their JioMart and Tata Neu platforms, respectively, industry executives said.

    Already, online discounts on electronics have been steeper at the Independence Day sales last month, about which leading brick-and-mortar mobile phone and electronic retail chains have jointly written to the brands. The retailers fear that predatory online discounts may return after two years this festive season and have requested brands to provide a level playing field across channels. Realme has said its discount offers will be across channels.


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