New Delhi : Major consumer durables companies like Godrej, Whirlpool, LG and Samsung are sharpening their focus on semi-urban markets. Given that Tier-II and Tier-III cities and towns account for over half their turnover, they are luring consumers by pricing their products below Rs 10,000 across categories.

The products include air-conditioners (ACs), refrigerators, TVs, water heaters and washing machines. For Godrej and Boyce, for instance, Tier-II and III cities contribute to nearly 60 per cent of overall turnover and the number is expected to increase significantly in the coming year. "Direct-cool (DC) refrigerators and semi-automatic washing machines are two categories where we continuously launch products below Rs 10,000, and these are the highest growth sectors in Tier-II and III towns and cities," says Kamal Nandi, vice-president, marketing, Godrej and Boyce.

While sales of DC refrigerators at Godrej have grown by 25 per cent in Tier-II and III cities, sales of semi-automatic washing machines are growing by 30 per cent. Godrej plans to introduce a range of DC refrigerators in March, June and the festive season - all priced between Rs 7,500 and Rs 10,000. In semi-automatic washing machines, Godrej plans to introduce a product priced between Rs 6,500 and Rs 10,000 in June-July this year. "As disposable income increases and more towns convert to urban areas, contribution from Tier-II and III towns and cities to our overall turnover will only increase," adds Nandi.

LG Electronics (India) has similar plans. It wants to push its mass-market sales by 10 per cent this year and also replace the traditional desert cooler with its A-series of ACs. This line of ACs is already present in South India and is priced between Rs 7,000 and Rs 10,000. Analysts reason that with the recent Index of Industrial Production (IIP) figures being favourable to the consumer durables sector (growth of 37.3 per cent); it makes sense for these players to expand their presence in rural and semi-urban markets. They caution, however, that it is important to have the right products in the lower-end category, since a bulk of demand comes from first-time buyers in Tier-II and III towns and cities which have not been directly hit by the recession. They also point out that there's a big replacement market for small home appliances as consumer lifestyles change, a big opportunity for manufacturers to tap.

"Players are going whole hog in terms of semi-urban markets, as with Godrej and its launch of its `chota cool' refrigerator. At a price of Rs 2,500, it is managing to enter the rural market. We will see this trend take off in a big way by the end of the financial year," reasons a senior analyst of a brokerage firm who did not wish to be quoted. Many newer entrants into the consumer durables category have caught on to this trend. Haier India is a case in point. It has products priced below Rs 10,000. These include commercial TVs priced between Rs 4,000 and Rs 10,000; mini bars and DC refrigerators whose prices range from Rs 6,260 to Rs 9,700; washing machines for Rs 6,490 to Rs 9,390 and water heaters priced between Rs 6,500 and Rs 9,500.