Can a scorching summer thaw India’s consumption slowdown?
Subscribe to enjoy similar stories. There may be a silver lining in the official weather agency’s warning of a more intense summer this year. Products such as air conditioners, coolers, and beverages could see particularly strong sales because of above-normal temperatures, providing relief for consumer-focused companies amid the ongoing slowdown in India’s urban consumption.
“In the past, many companies, across (consumer-focused) categories, have gained from a good summer," said Anand Ramanathan, partner and consumer industry leader at Deloitte India. Kantar Worldpanel data shows that fast-moving consumer goods (FMCG) such as talcum powder, ready-to-make beverages, and bottled soft drinks witness significantly higher household penetration during March-July than in other months. That holds true also for big-ticket white goods such as refrigerators and air conditioners.
“The consumer durables segment shows particular promise, with a clear trend of premiumization emerging as consumers move beyond entry-level products, thanks to accessible financing options like EMI plans," Ramanathan said. Market intelligence firm Bizom’s analysis of sales of cooling products such as coolers and fans over the previous three years shows a 40-60% volume increase in March relative to February. As India braces for a hotter-than-usual summer, consumer goods companies could see opportunity in the rising mercury levels following a string of subdued quarters.
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