Online purchase hits dealer sales of ACs

Chennai: Dealers of air-conditioners find that their sales volumes are getting impacted by the ramp-up of consumer durable sales on the online platforms.

A survey done by Kotak Institutional Equities found that volumes of 58 per cent of the dealers are getting impacted by the ramp-up of sales on online channels such as Amazon and Flipkart.  Of this, 28 per cent of dealers indicated that volumes are in downward trend and 30 per cent dealers said their sales have been flattish despite growth in industry volumes over the past few years.

Convenience in terms of flexibility of timing and availability of multiple options/brands are top two reasons why consumers prefer to buy ACs online. “As per our discussions with OEMs (manufacturers) such as Voltas, 10-12 per cent of company’s volumes come from online platform as compared to less than 5 per cent three years back,’ said Nishit Jalan of Kotak Institutional Equities.

Currently, customers have concerns regarding the quality of products available online. But these concerns are likely to ease over a period of time, giving further boost to online sales. The survey also found that more than 70 per cent of customers visit online websites to compare and review products of different brands before purchasing an AC.

Kotak finds that manufacturers will have to maintain a balance between online and offline channels as it cannot afford to ignore. “We believe that separation of SKUs (stock keeping units) between these two channels and offering higher margin to offline dealers to give them more flexibility to offer competitive pricing compared to online channel are steps that they can take to achieve the same over the next few years,’ said Jalan.