- 1 Definition / Scope
- 2 Market Overview
- 3 Key Metrics
- 4 Top Market Opportunities
- 5 Market Drivers
- 6 Industry Challenges
- 7 Market Outlook
- 8 Key Market Players
- 9 References
Definition / Scope
The nation’s appliance and consumer electronics sector is set to grow at a compound annual rate of 13.4%, to touch $20.6 billion by 2020.
However the demand from rural market will be in raising trend and there will be huge growth in buyers. Various government policies and increased liberalization has favored inflows of Foreign Direct Investments (FDI)
The Indian consumer durables segment can broadly be segmented into consumer electronics and consumer appliances. Consumer electronics are electronic equipment intended for everyday use, most often in entertainment, communications and office productivity.
Consumer Electronics includes various products like TVs Set Top Boxes Smart phones Tablets Audio and Video systems Gaming Products Electronic accessories Personal Computers CD and DVD players Camcorders Digital Cameras etc.
Consumer Appliances are household/Domestic appliances which includes, Refrigerators Washing Machines Air Conditioners Microwave Ovens Vacuum Cleaners Grinders Sewing machines Chimney Mixers Cleaning Equipment Electric Fans etc.
Also, the consumer durables market is divided as White Goods, Brown Goods and Consumer Electronics. Here white goods refers to large household appliances that used to be painted a white enamel finish such as refrigerators, air conditioners, washing machines, and ceiling fans Brown goods is term for items that were made from Bakelite in the old days, which includes kitchen blenders, grinders, pressure cookers, microwave irons, irons, vacuum cleaners, table fans Consumer electronics including televisions, smart phones, tablets, home computers and home entertainment systems.
- The global electronics industry is at US$1.8 trillion, of which India consumes around US$125 billion electronics. This consumption is expected to grow to US$400 billion by 2020.
- Consumer Durables market was worth $9.7 billion in 2014 and growing at CAGR of 13.9%. Indian Consumer Electronics market has been witnessing sustained double digit growth rate in the past few years.
- Increasing product awareness, affordable pricing, innovative products and the high disposable incomes have in the strong growth in the consumer electronics market in India.
- The growth in the coming years is possibly expected to be driven by the “rural market, as the government increases its focus on rural electrification”.
- Growth in E-commerce will enhance lots of online purchases and the future would go electronic in electronics products sales.
|Base Year||2016||Researched through internet|
Top Market Opportunities
Increasing levels of disposable income, and urbanization
During 2013–19, per capita income in India is expected to grow at a CAGR of approximately 6.6% to around US$2,200 in 2019 from ~US$1,500 in 2013. People with higher disposable income acts as a triggering factor for various purchase of consumer durable products. Increasing trend of working women population will drive demand for home appliances such as washing machines. Thus Purchasing power of consumers increased significantly.
Improved affordability of products, with India centric product introductions
The customer durables companies now a days concentrating on customers’ needs and they started manufacturing country centric products that to coming up with an affordable price tag attracting new customers. Product innovation and availability of new variants of products Then there would be CRT TV, now it’s Flat Panel (LED, LCD) and even more UHD, Curved TVs and lot more! Same way then just direct cool refrigerators, but now its frost free refrigerators, single/double door refrigerators etc.
And technology advancements paved way to lots of E-devices like laptops, tablets, smartphones, gaming devices like play station, x box etc. Thus the consumer durables market is now been crowded with lots and lots of products, each providing different features and technology, new options and additional advantages and has evolved from a market with limited products and few features. The replacement cycle has reduced from 9–10 years to 4–5 years for most of the goods in this sector.
Organized retailing will not only streamline the supply chain, but also facilitate increased demand, particularly for highend and branded products. Organized retail industry is expected to cover a market share of 15%–18%, from around 3% currently by 2020.
Easy Consumer financing as retailers offer attractive financing options
The demand for so called luxury or high end such as air-conditioners, washing machines and high end color TVs are raising huge, and this growth reflects narrowed price gap. In the case of expensive consumer goods, retailers are providing easy financing or Easy Monthly Installment (EMI) options to consumers by collaborating with banks.
Union budget 2015-16 also surely expected to boost the consumer durable sector. While the recent initiative, the most ambitious project 'Make in India' will lead to growth and investment opportunities leading to job creation in the country, the steps outlined in most recent announcement will definitely put India on the journey towards becoming a global manufacturing hub by 2022.
In line with the new government's 'Make in India' vision, the reduction of customs duty on certain inputs, raw materials, inter mediates and components in 22 items including, Magnetron, Organic LED (OLED) TV, LCD/ LED TV, components for use in the manufacturing tablet computers etc.
Also, the simplification in the tax regime will definitely help in creating an investor friendly environment and is a major step towards making India a 'manufacturing powerhouse'. To start with, the implementation of the uniform Goods and Service Tax (GST) from April 1, 2016 is a very encouraging step and will surely create a conducive economic environment for businesses across sectors.
It will also bring down the total incidence of taxes by eliminating cascading effect of taxes on goods and services. The budget also focuses on facilitating the 'ease of doing business' in India with reduction in corporate tax from 30% to 25% planned over the next four years 100% FDI is allowed under the automatic route in the Electronics Systems Design & Manufacturing sector and is subject to all applicable regulations and laws.
In case of electronics items for defence, FDI up to 49% is allowed under the government approval route, whereas anything above 49% is allowed through the approval of the cabinet committee on security.
The Consumer durables market is estimated to grow at a CAGR of 14.8 % to 12.5 billion dollars in 2015. It would be almost double that of 2010’s 6.3 billon dollars. Though the consumer durables markets trying to penetrate both urban and rural market, the major share (65%) of total revenues accounts for urban market and the remaining 35% being obtained from rural markets.
In India, the market share for Washing machines are expected to be grow from 101 INR billion in 2014 to 262 INR Billion by 2020. Refrigerators accounts for 81 INR Billion and by 2020 it would be 223 INR Billion. The Air Conditioner market too growing huge and by 2020 it would be 231 INR Billion from mere 86 INR Billion in 2014. Currently the biggest market is television market which accounts for 257 INR Billion in 2014, is projected to touch a sky high 1305 INR Billion by 2020.
In Urban market, the demand would be raising for the products like LED TVs, Refrigerators, laptops, Split ACs, Set top boxes, beauty and wellness products. Whereas, in rural markets, durables like refrigerators and other home appliances are likely to witness growing demand in the near future. The rural market has recently experienced around 30% growth rate in demand for electronics and home appliances.
According to the joint report by Consumer Electronics and Appliances Manufacturers Association (CEAMA) and consultancy firm EY, India is expected to rank fifth in the consumer durables market in the world by 2025. "The Indian market for consumer electronics and appliances is around $9.7 billion and has grown at a CAGR of 9.7 per cent over the 2010-2014 period and is poised to reach $20.6 billion by 2020,"
As per CEAMA estimates, the LED/LCD category is expected to grow at around 20 per cent from 2014 till 2020, while refrigerators are expected to grow at around 10 per cent in that period. Air-conditioners would continue to rise between 6 to 7%. Washing machines are expected to grow up to 9 per cent during the period. However, Set Tox Boxes would grow fastest primarily because of government’s digitization of the cable delivery system.
The total STB market was just 18.4 million units in 2012 and is expected to grow at a CAGR of 28.8 per cent to reach 39.4 million units by 2015. The number of DTH subscribers in India is expected to increase from 73.1 million in December 2014 to 200 million by 2018.
The ASSOCHAM report conveys that India's consumer electronics and durables sector is likely to reach Rs 52,000 crore by 2015. The huge potential has driven a host of new foreign consumer electronics firms to invest in the country in the past two years.
According to the “Make in India”, Electronic Systems Design Sector, the Expected electronic market in India by 2O2O :
- Telecom Equipment (USD 34 Billion).
- Laptops, Desktops, Tablets (USD 34 Billion).
- LED (USD 35 Billion).
- Consumer Electronics (USD 29 Billion).
- Set Top Boxes (USD 10 Billion).
- Automotive Electronics (USD 10 Billion).
- Medical Electronics (USD 8.5 Billion).
- Huge competition among various players both global and international brands - leading to higher spending in marketing to attract customers
- Increase in raw material prices – major raw materials costs were turned higher thereby increasing the manufacturing costs.
- Technological advancement- Day by day there are new innovations in each and every products, every companies put their heart and soul in bringing up a difference in their product and hence the product lifecycles short. In order to withstand the companies should be up to date and keep on innovating new features.
- Rural distribution – 68% of India’s population still lives in rural areas
- Entry of cheap products - as private labels in organized retail
There is tremendous rise in E-commerce and purchase of electronic devices online has shown a greater growth. There are about 243 million internet users in India. Thus being the 3rd largest nation using internet following China and US. When we take a look at the smart phone users in India, the accounts to about 185 million and its keep on growing. Internet user growth rate is about 14 per cent in India.
So it is wise that both the consumer electronics manufactures as well as retailers, be up to date to the technological innovations and try to capitalize on this recent electronic devices trend by expanding their presence in both the medium(offline and online). Still Touch and feel factor, or visually seeing the model been popular for certain Home appliances products.
Key Market Players
The noteworthy players in Consumer Durables market in India are, Samsung, Whirlpool, LG, Godrej, Sony, Hitachi, Videocon, Sony, IFB etc. Prominent Indian consumer durables companies include Bajaj Electricals, Blue Star, BPL, Godrej, IFB, MIRC Electronics (Onida) and Videocon etc. Multinational companies that sell consumer durables successfully in India include Whirlpool, Samsung, Panasonic, LG and Haier etc.
Samsung India Electronics, a subsidiary of South Korea's largest business group, Samsung, tops the revenue chart among consumer durables companies in India. Followed by home-grown Videocon Industries at the second position. LG, Sony Bajaj Electricals and Whirlpool India follows the revenue list and takes third, fourth, Fifth and Sixth position respectively.