High retail prices have not been able to dampen consumer preference for power efficient air-conditioners, thereby making retailers upbeat In a bid to control rising electricity bills, most consumers are opting for air-conditioners (ACs) that consume less power. To capitalise on the increasing consumer spending capacity, retailers have been launching latest products that provide high class service to consumers.
In 2007, star-rated or low power consumption ACs were launched in the domestic market by many companies. With the rising demand and the benefits of star rated ACs, the Bureau of Energy Efficiency has now made it mandatory for all companies manufacturing ACs to be star rated from January 2010.
 Recently, retail prices of most consumer durables have surged in the domestic market owing to hike in raw material prices such as steel and copper since December 2009. Although presently, the prices of raw materials have been gradually stabilising, most manufacturers, who tend to purchase them in advance due to the fear of further increase in the commodity prices, witnessed an increase in the overall cost production of consumer durables like ACs. As a result, leading companies like LG Electronics were compelled to increase their product prices this year. However, hike in AC prices has not been able to dampen consumer sentiment as they continue to purchase ACs with various sophisticated features offering better services. In fact, the demand for five star rated ACs, offering the benefit of low electricity consumption, is gradually rising in the domestic market. Moreover, it has been noticed that the demand for two and three star rated ACs that have average energy consumption, has also been growing this year. This has made retailers optimistic of recording steady sales in 2010. Retailers have also noticed that consumers, who purchase ACs for the first time, are opting for two or three star rated ACs, which are available at reasonable rates. It must be noted that besides consumers in the metros, these AC models are also becoming popular among consumers in rural and semi-urban markets.
According to Neil Khanna, director of Disha Electronics, a small-sized dealer of consumer durables in Mumbai, “Domestic consumers are gradually becoming aware about the significance of ‘green’ technology and are seen to be purchasing products that promote green technology. As a result, the demand for energy saving products is gradually growing in the country. Although these products usually come at a high price tag, services and benefits of these products are long lasting and also facilitate in lowering energy consumption, which have driven its uptake among consumers.”
Strategies to improve sales
In order to further improve sales, retailers can display a variety of ACs providing unique services. More such AC models should be launched in the domestic market which are mechanised in a manner that they can adjust to the surrounding automatically, not requiring consumers to lower or increase temperature manually.
In this context, Arun H Jayana, proprietor of A M Industries, a mid-sized supplier of consumer durables products in Bengaluru, says, “Besides introducing new products, retailers should also smartly promote their products among consumers by leveraging social networking sites and undertaking proper advertising campaigns.” Therefore, by implementing these strategies retailers would be able to increase AC sales, thereby maintaining steady profit margins.
Sabrina Mitchell |
