- A normal monsoon, coupled with enhanced government schemes, could help households in rural markets spend on low-ticket consumer electronics
- Companies are also seeing need-based, low-value consumer products such as LED bulbs selling at a faster clip
Consumer durable companies, which rely largely on urban markets for sale of large appliances, said small-towns and parts of rural India could hold the key to reviving short-term demand. Forecast of a normal monsoon, coupled with enhanced government schemes, may help households in these markets spend on low-ticket consumer electronics.
With lower penetration of appliances and consumer durables in small-towns and villages, companies see larger potential to sell direct cool refrigerators, twin-tub washing machines, fans, coolers, and television sets in such places. Most companies that draw anywhere between 10 and 20% of their sales from smaller markets said they are expecting quicker recovery in rural markets as these have been outside containment zones, are less affected by the pandemic and have fewer restrictions.
Besides, forecast of a normal monsoon, additional government allocation towards the rural employment guarantee programme and reverse migration towards villages could aid the rural economy, too. However, analysts expect urban markets to slow down on account of job losses and salary cuts.
Source: livemint
