Home Appliances Market in India

The Indian economy is increasing day by day and so is the demand of the people. In order to cater the needs of over 1.2 billion people there has been a silent revolution in home appliances market. We Indians now have higher purchasing power than ever before than ever before, all because of the lower inflation and fuel prices. Internet connectivity has enabled us to have better access to quality products at discounted prices. The current consumer base is going to increase from 25 million to 50 million by 2018.

Home appliances are one the fastest growing industry segment in India. Even during global recession this sector has witnessed significant investments. Urban markets accounts for 65% of the total revenue in this sector. On the other hand the rural markets accounts for 35 percent of the total revenue with a CAGR (Compound Annual Growth Rate) of 25%. Demand in urban markets is expected to increase for products like LED televisions, Laptops, Air conditioning, etc. In rural markets durable like refrigerator and as well as other home appliances are likely to increase in demand in the coming years. This growth in demand is been driven by new technology, innovative models, lifestyle products and replacement demand.  According to the recent research and survey the following trend is seen in the various categories of home appliances-

Refrigerators -

Refrigerators have the highest penetration in India of 31 percent with over 14 million units sales in the year of 2013. LG was leading manufacturer of Refrigerators in the market accounting for 24.20 percent of total sales while Samsung behind it with 20.60 percent of total sales. The market share of direct cool and frost free segment is 76.3 per cent and 23.7 per cent respectively. Key growth drivers are lower prices and rising demand for frost-free refrigerators.

Air conditioners -

Air conditioners accounts for penetration of 7 percent in the year 2015 while it was 13 percent in the year of 2013. Total of 1.94 million AC units were sold in the year of 2015. High income growth and rising demand for split ACs are the key growth drivers.

Washing Machines - 

Washing Machines are the second largest contributor to the consumer appliances market. In FY2013 total sales were around 7.5 million units. . LG Electronics continue to be the market leader accounting for 25 % of the total sales followed by Samsung Electronics with 23.2% in 2013 .6-9.9 kg is the most popular category in India with 70% shares in total sales.

Microwave ovens -

Due to ease of operation and portability freestanding microwaves continue to dominate the Indian market. LG Electronics continue to be the market leader accounting for 32 % of the total sales followed by Samsung Electronics with 22%.

Televisions -

Colour televisions are the largest contributors to this segment with market size estimated at 23.0 million units in 2012. The price decline due to relatively low import duty on LCD panels and the introduction of small entry size models are key growth drivers in this segment.

Set-top boxes (STB)-

Due to the introduction of the conditional access system and expansion of DTH the set-top box (STB) market is growing rapidly. Subscriber base is expected to reach from 23 million during 2012 to 200 million by 2018 thereby making India the one of the world’s largest DTH market

According to an extensive research done by Nexhop, the statics are greatly in favor of the home appliances market. India has been the largest growing consumer electronics market with 24 percent CAGR four times in a row. India will become the fifth largest consumer durables market in the world by 2025. It is expected to grow at CAGR of 14.8 percent from US$ 7.3 billion in Financial Year 2012 to US$12.5 billion in Financial Year 2015. Online retailing is anticipated to grow up to 8.08 billion industry by 2016. Following are the reasons that were critical for the rise of the home appliances industry in India.

Revival of economy - 

After the national elections in May 2014 the consumer appliances industry improved significantly. This happened due to subsequent boost to sentiments among Consumer appliances companies and consumer alike. All categories of consumer appliances witnessed significant growth both in terms of value and volume in and after 2014.

Growing demand - 

Demand for consumer appliances has increased tremendously due to the improving economy. With lower inflation and rise in per capita income, people can now buy their desired products more easily. 

Investments -

Giant manufacturers like LG, Samsung etc. have invested significantly in India for setting up manufacturing and sales unit. Global recession was also not able to stop investors to pour money into the Indian economy.

 

Make in India campaign - 

The new government has emphasized a lot on domestic manufacturing. Through the Make in India initiative India’s Prime minister has invited leading companies from all over the world to set up their manufacturing bases in the country. 

Ecommerce -  

Online sales have resulted in huge market growth. Online sellers have been very successful in wooing customers through competitive pricing and huge discounts. This could not have been possible without the increase in Internet connectivity all over India. In order to tackle ecommerce giants like Flipkart, Amazon, Snapdeal, Shopclues, etc. leading consumer appliances companies and other large retailers have opened online stores to target online shoppers.

With improving economy, more disposable income and promotions from retailers and companies a bright future is expected for consumer appliances industry in India. It is expected to witness growth in both terms of value and volume. Internet retailing and electronics and appliance specialist retailers will boost the consumer appliances market to grow. If you have any questions regarding to home appliances don't hesitate to call us.