The entire consumer durables market in India will see an 8 to 10 per cent surge in sales over the next eight months. The industry will soon start advertising aggressively.
All geared up and conquering the fifth largest position in the consumer durable market, India is growing at an average rate of 15 per cent per year. The country, undoubtedly, is one of the largest growing electronics market in the world, and ranks 3rd largest when it comes to the TV industry.
Electronic items that were formerly considered as luxury goods for a long period of time have become basic necessities of sorts today. It will not be wrong to say that India's consumer market is riding the crest of the country's economic growth.
The consumer durable companies too have started concentrating on customers' needs and have come up with several tailor build solutions in order to bring best technologies at best prices. With the growing pressure and intensifying competition, the market too, has become very dynamic.
Share of urban and rural markets
Urban markets account for the major share (65 per cent) of total revenues in the consumer durables sector in the country. Demand in urban markets is expected to increase for products such as LED TVs, laptops, split ACs and beauty and wellness products.
In rural markets, durables like refrigerators as well as consumer electronic goods are likely to witness growing demand in the coming years as the government plans to invest significantly in rural electrification.
Attractive opportunity for manufacturers
The consumer durables market has grown highly cluttered. The burgeoning consumer electronics market in India presents an attractive opportunity to manufacturers.
Most of the global corporations are looking at India as a regional hub for manufacturing and sales to cater to not only Indian market, but SAARC, Middle East and African markets as well. Government of India's “Make In India” initiative has provided fresh impetus to this sector too.
Revised GST norms will improve penetration and affordability
Revised GST norms have got a positive response from the consumer durable industry. Recently, the government has taken a good initiative by reducing GST on white goods by 10 per cent. This will certainly improve the products penetration and affordability.
The recent move to cut rates should also help boost sales, particularly in the consumer durable segment over the next few months. The entire consumer durable market will see an 8 to 10 per cent surge in sales over the next eight months and the industry will start advertising aggressively.
Television and air-conditioners to be major categories
With technology advancing, like never seen before, it seems the best is yet to come. Among all consumer durable product portfolio, the product categories which will see a major fillip are the high-end television and air conditioners.
The strong macro drivers for the growth include: domestic consumption as a vital driver of India's growth engine, primarily owing to the country's large population, and an expanding middle class—key driver of consumer goods demand. A rising middle class with higher disposable incomes, aided by favorable demographics, will burnish the consumer goods industry's prospects significantly.
Customer insights and technology based product development ‘keys to success'
With relevance to the consumer electronics segment, we have already witnessed immense diversity and rapid evolution of technology that has transformed the conventional ways. Brands in order to bring differentiation have started focusing on product innovation in focus. Superior customer insight and technology based product development have become the key success factors.
Undoubtedly, it's the product innovation framework that underlines innovation strategy enabling brands to simultaneously differentiate from the competition and fight the large global players. Meanwhile, superior customer insight provides the “big-idea” and enhances in-house R&D capability limitations.
Over the span of one year, the direction of technology has been inclined towards bringing the holistic consumer experience. Speaking of which, we have already experienced the influx of technologies that can work on the fingertips and can be operated over mobile apps or other related features. The upgrades and the technology have tapped all the segments. Basically, the government's digitization drive has catapulted the demand for budgeted consumer durable.
Overall, the consumer durable industry has been on a high-growth trajectory throughout the year aided by the government support and emergence of innovative technological solutions.
The author is Director, Business Operations, Truvison. Views are personal.