Indian consumer durables market is broadly segregated into urban and rural markets and is attracting marketers from across the world. The sector comprises of a huge middle class, relatively large affluent class and a small economically disadvantaged class. Global corporations view India as one of the key markets from where future growth is likely to emerge. The growth in India’s consumer market would be primarily driven by a favorable population composition and increasing disposable income.Per capita GDP of India is expected to reach US$ 3,273.85 in 2023 from US$ 1,983 in 2012. The maximum consumer spending is likely to occur in food, housing, consumer durables, and transport and communication sectors.
- Indian appliance and consumer electronics (ACE) market reached Rs 76,400 crore (US$ 10.93 billion) in 2019.
- Appliances and consumer electronics industry is expected to double to reach Rs 1.48 lakh crore (US$ 21.18 billion) by 2025.
- Electronics hardware production in the country increased from Rs 1.90 trillion (US$ 31.13 billion) in FY14 to Rs 4.58 trillion (US$ 65.53 billion) in FY19.
- Television industry in India reached an estimated Rs 787 billion (US$ 11.26 billion) in 2019 and is projected to reach Rs 955 billion (US$ 13.66 billion) by 2021.
- As of FY20, electronics, domestic appliances and air conditioner market in India were estimated to be around Rs 5,976 crore (US$ 0.86 billion), Rs 17,873 crore (US$ 1.80 billion) and Rs 12,568 crore (US$ 2.56 billion), respectively.
- Shipment of TVs in India increased 15 per cent annually to reach the highest-ever level of 15 million units in 2019.
- Smartphone shipments in India increased eight per cent y-o-y to reach 152.5 million units in 2019, thereby making it the fastest growing among the top 20 smartphone markets in the world.
- The S&P BSE Consumer Durables Index was up 6.8 per cent in Jan 2020 and gained 32.1 per cent in last one year.
According to Department for Promotion of Industry and Internal Trade, during April 2000 – March 2020, FDI inflow into the electronics sector stood at US$ 2.79 billion.Following are some recent investments and developments in the Indian consumer market sector.
- Consumer durable loans in India increased 43 per cent y-o-y to Rs 6,495 crore (US$ 921.4 million) in FY20.
- In January 2020, Godrej appliances announced plans to foray into air-cooler segment and acquire a market share of 15 per cent in the segment in the next five years.
- In May 2020, Philips announced investment of Rs 250-300 crore (US$ 35.47-42.56 million) to boost its manufacturing and R&D facilities in India.
- In December 2019, Kent RO Systems Ltd announced an investment of Rs 150 crore (US$ 21.46 million) to set up a new manufacturing unit over next three years.
- In November 2019, Nokia entered in partnership with Flipkart to enter consumer durables market in India with plans to launch smart TVs.
- In October 2019, Apple Inc. entered in an agreement with Maker Maxity mall, co-owned by Reliance Industries, to open its first company-owned iconic outlet in India.
- In August 2019, Voltas Beko launched India’s first five star washing machine.
- Micromax plans to invest US$ 89.25 million by 2020 for transforming itself into a consumer electronics company.
- Haier announced an investment of Rs 3,000 crore (US$ 415.80 million) as it aims a two-fold increase in its revenue by 2020.
- In January 2020, the Bureau of Energy Efficiency (BEE) made it mandatory for all room air conditioners to have a default temperature of 24 degrees Celsius.
- National Policy on Electronics Policy was passed by the Ministry of Electronics & Information Technology in February 2019.
- A new Consumer Protection Bill has been approved by the Union Cabinet. Government of India will make the existing laws more effective with a broader scope.
- The mobile phone industry in India expects that the Government of India's boost to production of battery chargers will result in setting up 365 factories, thereby generating 800,000 jobs by 2025.
- The Union Cabinet has approved incentives up to Rs 10,000 crore (US$ 1.47 billion) for investors by amending the M-SIPS scheme in order to further incentivise investment in the electronics sector, create employment and reduce dependence on import by 2020.
- The Government of India has allowed 100 per cent Foreign Direct Investment (FDI) under the automatic route in Electronics Systems Design and Manufacturing sector. FDI into single brand retail has been increased from 51 per cent to 100 per cent; the government is planning to hike FDI limit in multi-brand retail to 51 per cent.
Indian appliance and consumer electronics (ACE) market is expected to increase at 9 per cent CAGR to reach Rs 3.15 trillion (US$ 48.37 billion) in 2022. Demand growth is likely to accelerate with rising disposable income and easy access to credit. Increasing electrification of rural areas and wide usability of online sales would also aid growth in demand.