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    Primary sales of white goods off to a slow start

    Synopsis

    This was in stark contrast to the widespread expectation that primary sales of white goods will pick up significantly in July since retailers had stopped buying from end-May.

    ET Bureau
    KOLKATA: Primary sales of refrigerators, washing machines and televisions from companies to distributors and retailers took a beating in July, dipping by up to 25% over the same month last year as it took manufacturers and large trade partners almost 10 days to make their billing systems compliant with goods and services tax (GST). The industry was left with no inventory until then as companies halted production toward June-end for the transition.

    This was in stark contrast to the widespread expectation that primary sales of white goods will pick up significantly in July since retailers had stopped buying from end-May to clear out old stock and had run discounts throughout June whereby the trade almost exhausted inventory. The Diwali-like sale in June expectedly led to 40-45% drop in retail sales in July, three senior industry executives said.

    “July in itself is a dull month for the industry. While we did expect brisk primary sales, the GST transition took time to be settled, which led to 20-25% dip in primary sales. Production too resumed after the system became GST compliant. The sales situation, however, is improving week by week,” said Videocon chief operating officer, CM Singh.

    Godrej Appliances business head Kamal Nandi said there were challenges in both purchase and supplies whereby almost 10 days were lost in July when there was no business at all. “And then it took time for products to reach branches and billing. While the transition to GST has been good, there has been caution at both our end and trade whether we are complying fully with the law. This caution is not allowing to ramp up primary sales immediately,” he said.

    While around 30-35% of total white goods sales is from national, regional and local retail chains, the balance is still led by distributors supplying to neighbourhood dealers and small shops across the country. The large chains managed the transition faster while the companies are still hand-holding the small dealers in the transition to the GST system.

    In fact, a senior executive with a leading white goods maker said that it was forced to undertake backdated valueadded tax (VAT) billing in July to some small dealers since they were not ready for GST. GST billing for all partners will start from August.

    Industry expects the early festive season this year will ramp up primary sales in August. Panasonic India head for sales and services, Ajay Seth, said July was slow, particularly in the North-East, which is a distributionbased market where the infrastructure was not GST-ready.

    ================================ Madison Media Buys B’luru Co HiveMinds

    NEW DELHI: Madison Media has acquired a controlling stake in Bengaluru-based marketing agency Hive-Minds Innovative Market Solutions for an undisclosed amount.

    “Marketers are embracing customer focused digital opportunities. I am delighted at the progress Madison Media has made in the digital space in the last one year and having HiveMinds as part of us will further strengthen the way we partner with our clients in their digital transformation journey,” said Lara Balsara, executive director of Madison World, which owns Madison Media.

    Madison Media handles digital campaigns for brands such as Marico, Asian Paints, Godrej Properties, Tata Chemicals and ITC. Its parent company had recently acquired majority stake in another Bengalurubased PR agency, Brandcom.

    Balsara declined to give the financial details of the deal.

    HiveMinds, which works with Bigbasket, ABOF, Cleartrip and Cloudnine Hospitals, among others, was founded six years ago by Jyothirmayee JT. It specialises in search, social, performance marketing and programmatic buying, and in ecommerce, education and travel. Its 70-member-strong team has handled digital marketing for startups like TutorVista, Babyoye, redBus, TaxiForSure, Simplilearn and MobiKwik.

    Madison World is well known for its media buying and creative capabilities.


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