LG Electronics Targets Double-Digit Growth During Festive Season

Festive demand is expected to give LG Electronics India (LGEI) a strong boost this year, with the company projecting double-digit sales growth over the previous festive season. Improved consumer sentiment, greater affordability following GST changes and a longer festival window are expected to support demand, a company official said.

Alongside its domestic growth plans, LGEI is strengthening its export business by entering new markets with its premium product portfolio. The company expects overseas markets to contribute a double-digit share of its overall revenue in the coming years.

The consumer electronics major is also expanding its presence across the fast-growing appliance and consumer electronics segments in India, said Sanjay Chitkara, Co-Chief Sales & Marketing Officer, LGEI.

LGEI reported 15.5 per cent revenue growth in the June quarter of the current financial year despite continued input cost pressures and has carried this momentum into the current quarter.

Commenting on the September quarter, Chitkara said, “We have maintained the growth momentum so far.”

The company is also expecting an extended festive period to support sales this year. On the outlook for festive demand, he said, “With Diwali falling on November 8 against October last year, the company expects a longer festive window to help both consumers and manufacturers.”

“We are expecting much better growth in this quarter during the festival time because of the low base last year due to the GST transition and consumer sentiments. So, we are expecting a comfortable double-digit growth,” he added.

LGEI on Tuesday launched its new range of Semi-Automatic Washing Machines, comprising 15 models across 8 kg to 12 kg capacities.

According to Chitkara, washing machines remain a significantly underpenetrated category in India, with penetration at roughly 22 per cent. Semi-automatic machines continue to account for a sizeable portion of household purchases.

“Around 50 per cent of LG Electronics volumes of washing machines come from the semi-automatic segment, roughly 2.2 million semi-automatics every year we sell and 30 per cent value also comes with this product,” he said.

The company has also seen a positive start to the festive season, with Onam in Kerala on August 26 providing an early indication of consumer sentiment across the country.

“So, consumer sentiments are very high and GST has already made our products very much affordable and a lot of new products, new technologies, are lined up during this festival. We have also prepared a lot of consumer offers. So, overall we are expecting a bumper sale this year,” he said.

To prepare for the anticipated demand, LGEI has started pre-production for the festive season and asked trade partners to lift stocks in August and September, ahead of the peak period. The company has also introduced pre-buying schemes for its partners.

“We do a lot of preparation for festivals and we give our partners a longer period of credit also before the festival so that they plan early and they buy their stocks for the festival peak season in advance. So, things are going as per plan and we are very confident that there will be no disruption of supply at the consumer end,” he said.

The festive launch pipeline includes French-door refrigerators, QNED and OLED televisions, a newly introduced chest freezer range and 15 new semi-automatic washing machine models.

Exports are emerging as another key growth area for LGEI. Chitkara described exports as a “very focused area and growth engine” for the company. The segment currently contributes around 6 to 7 per cent of revenue, translating to approximately USD 150 million.

“When we did our IPO, we were exporting to around 47 countries and now we are exporting to 66 countries,” he said, adding that the company has expanded to “new geographies and new product categories for export portfolio”.

“We are committed to bringing it to a double-digit contribution very soon,” he said.

LGEI is also using its Essential Series to expand its presence in developed markets. Introduced last year, the affordable-premium home appliance range is currently being targeted across multiple export markets.

“We introduced the Essential Series and we are targeting 22 countries for exports,” he said.

The company expects its upcoming manufacturing capacity to further support its export ambitions. According to Chitkara, LGEI's plant at Sri City is expected to become operational this year, with an investment of around Rs 5,000 crore, helping the company scale up exports further.