Rising Consumption Demand, Increasing per Capita Incomes, and Affluent Lifestyles to Drive the Market
In FY2018, the overall Indian appliance and consumer electronics (ACE) market was estimated at INR 210,000 Cr and is set to grow at a compound annual growth rate (CAGR) of 9%. The cooking appliances market accounted for 7.2% of the ACE market value in FY2018. Increase in consumer appliances market in the country has boded well for the kitchen appliances market, where products made specifically for the Indian market are expected to have higher sales. The kitchen appliances market will grow at a faster rate than the overall ACE market. Indian consumers are inherently price conscious. Value for money is a key concept followed across almost all of the product segments. The large young population with explorative mindsets will overcome the challenge of price sensitivity, and products with high-end features will be preferred by the consumers. The Indian consumer appliances market, as a whole, witnessed robust growth trends in the last 5 years and is expected to see further growth, reinforced by surging rural consumption, increasing urbanization, reducing replacement cycles, increasing penetration of lifestyle appliances, and availability of multiple brands at various price points. Furthermore, the number of participants in the consumer appliances industry is also increasing.
India, as a nation, is on its growth path. The long-term growth prospects of the Indian economy is positive, due to its young population, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. Tier II and Tier III cities will be the upcoming high disposable-income cities with greater purchasing power parity, high Internet penetration, and increasingly brand-conscious young population. There has been a drastic increase in urban towns and cities in the country in the last 5 years. Apart from changing lifestyles and working styles, urbanization has led to growth in the organized retail sector; this, in turn, has led to a change in consumers’ buying behavior. In particular, the decision making process before buying something has been significantly affected. The rise in urbanization in India has also led to its people having more additional disposable income than before.
A key driver of growth for the Indian consumer appliances market is the country’s burgeoning middle-class population, along with a relatively small proportion of its affluent class. This growth in India’s consumer market demand is driven primarily by rising disposable incomes in Indian households and easy access to credit, which induces growing purchasing power. Increasing electrification of rural areas, along with the rising influence of social media and the popularity of online sales, is also likely to aid growth in demand. Two-thirds of the total revenue is generated from the urban population and the rest is generated from the rural population.
