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Consumer electronic companies like Samsung, LG line up freebies this festive season

KOLKATA: Gifts and freebies are staging a comeback this festive season in consumer electronics and white goods markets where top brands have set aggressive sales targets despite recent price increases and poor consumer sentiment.

Top companies such as Samsung, LG, 
Sonyand Panasonic target 20-30% growth in their festive season sales over last year through aggressive marketing and pushing high-end products, industry insiders say.

The companies have increased their marketing and promotion budget this season from Onam to Diwali by 10-20% over the same period last year, which includes expenses on gifts, below-the-line activities on the shop floor and advertisement.

Freebies are back in the market after a gap of five years when companies focused more on value-added bundled deals and extended warranty.

Consumer electronic companies like Samsung, LG line up freebies this festive season

"Offering more value to consumers would help increase demand during the festive season," says Atul Jain, senior vice-president for consumer electronics at Samsung India, which has set an ambitious target to grow sales by 40-50% during September-November. Almost 40% of annual consumer electronics and home appliances sales in the country take place in the three-month festive season.

While the steep fall in the value of the 
rupee has forced makers of brown and white goods to increase prices by 10-12% in the past two months, they are now focusing on premium products and new launches to push sales.

Manish Sharma, managing director at 
Panasonic India, says that despite the weak consumer sentiment, no company wants to go slow on new launches and promotions. "During weak sentiments like now, what matters in this business is perception and the visibility of the brand, which new launches and premium products offer," he says.

Samsung's new launches for the festive season includes ultra HD television in the Rs 3.2 lakh to Rs 4.3 lakh segment, new range of air-conditioners priced above Rs 1.6 lakh and refrigerators priced at Rs 2 lakh.

Sony is rolling out a new range of high-end televisions, laptops and smartphones, while LG will soon launch two new models of ultra HD 3D television.

LG India, the country's largest consumer durables maker, is spending around Rs 100 crore on flat panel television marketing alone this festive season, with a target to grow sales more than 50% over last year. Sanjeev Aggarwal, sales head at LG India, says the company's promotion will focus on upgradation of purchases.

Premium product segments such as 40 inches and above LED televisions, 3D televisions, smartphones, split air-conditioners, multi-door frost-free refrigerators and front-loading washing machines are growing at a much faster pace of 40% than the overall market.

The overall flat panel television market is growing at a year-onyear rate of 10% while growth in home appliances is just 2% due to price increases and an economic slowdown that has forced consumers to check their discretionary expenses. The most impacted is the entry-to-mid segment products. Marketers, however, hope to meet their sales targets this festive season on increasing demand in premium segments and in rural markets, backed with huge promotional offers.