As the summer season progresses in several Indian states, the demand for refrigerators and ACs is expected to get a boost. And as per a report, once the demand for these products stabilizes, white goods manufacturers will pull back the existing promotional schemes such as discount and cashback offers on refrigerators, televisions and washing machines.
At present the industry is witnessing low demand for refrigerators and washing machines, prompting players in the space to cut down prices. However, as and when sustainable demand is achieved, the prices of these white goods might shoot higher.
"Washing Machines, Refrigerators, and Television (bigger than 43 inches) continue to see cashback and financing schemes aimed at reducing inventory. Pricing rationality should emerge once demand pick-up is sustainable," brokerage firm Emkay said in a research report.
Further, brands given the ongoing IPL season and upcoming ICC World Cup match through these promotional and attractive financing schemes are looking at increasing the demand for bigger screen TVs.
In the air-conditioners segment, there is seen a gradual uptick in demand. Also the industry has managed to sell-off the previous inventory. RAC(Room Air Conditioning) industry due to a weather shift is also slowly withdrawing cash backs and discounts.
Nonetheless, even though the demand has picked up for RACs across India, there will not be an aggressive price hike for the product given the industry competition. "Price increases have not happened, but will happen once demand rebound is clearly visible," Emkay report added.