e-commerce

Sales of white goods witness unprecedented shift from offline to online: Report

e-commerce

There is a discernible shift in the purchase of white goods by the Indian consumers with online sales accounting for 9-30 per cent of overall category sales by the companies last year, the latest data from sales tracker GfK showed.

Thus the e-commerce purchases of televisions, air-conditioners and microwave ovens helped the industry offset decline in sales at brick-and-mortar stores last year.

Considering that none of the big companies thought consumers would buy a TV or washing machine without the touch-and-feel experience of the product in the store, this has come as a pleasant surprise (or cashback driven). E-commerce is now being viewed as by players as one of the important channels to operate in the market.

Online volume sales grew 50-60 per cent last year over the previous, industry executives said. This is in comparison to GfK’s estimate of 1 per cent volume growth in overall domestic appliance market and 5 per cent by value in the offline channel, as per a report appearing in ET.

Online sales accounted for 20 per cent of flat panel television sales volume in 2018, 30 per cent convection microwave ovens, 10 per cent of washing machines and 9 per cent air-conditioners. For refrigerators, e-commerce accounted for around 5 per cent of total sales. Online sales account for 35 per cent of the total Indian sales volume of smartphones.

The report attributes this to increased affordability, focus on energy efficient products, increasing digital penetration and rise in aspiration.

Industry executives said the contribution of online has almost doubled over 2017, led by the price-aggressive brands like Xiaomi, TCL, BPL, Vu and Thomson in television while brands like Samsung, Bosch and Siemens drove online appliance sales.

The top e-commerce marketplaces have managed to gain consumer confidence whereby customers have shed the inhibition to buy electronics online. They have also invested heavily on marketing unlike any offline retailer.

However, the inhibitions are still there in smaller towns, according to online-exclusive BPL India COO Manmohan Ganesh.

Online contribution in overall appliance sales has reached the threshold in India of 7-8 per cent as in developed nations. Unless e-commerce makes deep penetration in up-country towns, which is a logistic challenge for consumer durables, online contribution to overall sales may not move much.

Last Diwali, while brick-and-mortar retailers had a flat-to-low single-digit growth in sales, online brands reported over 30 per cent growth in sales with Amazon and Walmart-owned Flipkart reporting their highest ever sales of televisions and appliances.

In a price sensitive Indian market, offline is often used for the touch-and-feel of the product before making any heavy purchases by the consumers. Needless to say, the channel offering competitive price, is the preferred choice.

e-commerce

Sales of white goods witness unprecedented shift from offline to online: Report

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