Electronics is the most popular category this festive season-:- Equity Research

The much-awaited e-commerce sales have just concluded, and initial reports suggest an increase of about 40-50 percent over last year’s sales for the major players. More than 50 percent of the spending happened on electronics and home appliances this year, leaving behind other categories like fashion, lifestyle, books, home décor and furniture. Rapid changes in technology, stiff competition between brands and online deals this season have made gadgets the most popular, with many who were baited to replace their old phones, tablets, laptops and televisions. And this is just the first wave of the season, with gifting, and offline sales that have not even taken off as yet. Better Consumer Sentiment At a macro level, there are several reasons why we have seen a jump in spending. Discretionary incomes have gone up with higher salaries and pensions being disbursed under the Seventh Pay Commission. The repo rate cut is also bound to affect interest rates that have led to higher sales. Demand has gone up in the rural market and tier II and III towns due to the good monsoon this year, giving people the purchasing power to upgrade to smartphones for the first time ever. Better infrastructure and connectivity in these areas has also led to higher consumer interest in technology products. E-tailers also give access to brands and models that may not be available at one’s local electronics store. High Visibility Commanding the highest share of voice, electronic products are the most visible with everyone contributing to the noise – brands, e-tailers, store chains, banks, warranty and insurance providers all investing heavily in marketing during September and October. Most big product launches also happen now, with major companies in this sector looking at 30-40 percent growth in their sales during this period. Electronic products and home appliances still take the highest share of a shopper’s wallet. However, over 90 percent of consumers still fail to buy an extended warranty or damage protection plan. Device failure rates have crossed more than 50% in India, and repairs today cost up to as much as the price of a new device. Further, gadgets and appliances usually come with a year of manufacturer’s warranty that does not cover accidental, physical or liquid damages. If you plan to buy a gadget or a home appliance this year, don’t forget to check the coverage terms of the brand warranty. You can ask for or buy an extended warranty or damage protection plan at the e-tailer’s site, app or store, wherever you are purchasing the product from.